explain

4. John has decided to open a restaurant, and he is trying to decide how much debt to use in its capital structure. It will need $100,000 in assets and will have an EBIT of $45,000. It can finance up to 50% of its assets with debt acquiring it at a 10% interest rate. As it is just being formed, it has no liabilities yet. The applicable tax rate is 40%. What is the difference between the expected ROEs if it finances with maximum debt vs. going all equity