If a Firm Chooses to Use Equity for External Funding

If a firm chooses to use equity for external funding and leaves debt constant within its forecasts, what does this imply about the financial statement forecasts?

A) Interest expense will vary throughout the forecast.
B) The taxable income will change due to increasing dividends.
C) The equity will increase by net income every period assuming external funding is necessary.
D) The debt/interest problem does not exist.