Question: Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt-HD has more debt and pays

Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt-HD has more debt and pays a higher interest debt. Based on the data given below, what is the difference between the two firms' ROES? Applicable to Both Firms Firm HD's Data Firm LD's Data $200 Debt ratio 50% Debt ratio EBIT $40 Interest rate Interest rate 10% 35% Assets 3096 1296 Tax rate a. 2.29% b.2.18% c. 2.41% d. 2.54% e. 2.66%

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