Consider the following financial data for Leons Music Stores:

Statement of Financial Position as of December 31, 2012

Cash & equivalents	$	83,000		Accounts payable	$	115,000
Accounts receivable		245,500		Notes payable		181,000
Inventories		372,000		Accruals		52,500
Total current assets	$	700,500		Total current liabilities	$	348,500
				Long-term debt		361,000
Net fixed assets		545,000		Common equity		536,000
Total assets	$	1,245,500		Total liabilities & equity	$	1,245,500

Profit & Loss Statement for the Year Ended December 31, 2012

Net sales	$	412,500
Cost of merchandise sold		242,000
Gross profit	$	170,500
Operating expenses		83,500
Earnings before interest and taxes (EBIT)	$	87,000
Interest expense		49,000
Earnings before taxes (EBT)	$	38,000
Federal and state income taxes (35 percent)		13,300
Net profit	$	24,700

Calculate Leons return on equity (ROE).

	a.	14.49%
	b.	3.53%
	c.	5.99%
	d.	4.61%
	e.	1.98%