Commonwealth Construction $($CC$)$ needs $$3$ million of assets to get started, and it expects to have a basic earning power ratio of $35\%.$ CC will own no securities$,$

all of its income will be operating income. If it so chooses, CC can finance up to $35\%$ of its assets with debt, which will have a $10\%$ interest rate. If it chooses to

use debt, the firm will finance using only debt and common equity, so no preferred stock will be used. Assuming a $25\%$ tax rate on taxable income, what is the

difference between CC$\text{'}$s expected ROE if it finances these assets with $35\%$ debt versus its expected ROE if it finances these assets entirely with common stock?

Round your answer to two decimal places.

percentage points