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 rate on that debt. Based on the

data given below, what is the difference between the two firms' ROEs? Applicable to Both

Firms Firm HD$\text{'}$s Data Firm LD$\text{'}$s Data Assets $$300$ Debt ratio $60\%$ Debt ratio $20\%$ EBIT $$80$

Interest rate $15\%$ Interest rate $11\%$ Tax rate $40\%$ Applicable to Both Firms Firm HD$\text{'}$s Data

Firm LD$\text{'}$s Data Assets $$200$ Debt ratio $50\%$ Debt