Question 8 Mopani Ltd. buys, process and freeze dries, Mopani worms for consumption using a variety of industrial packaging techniques. The company has been successful, but when the company was young, it borrowed heavily at a high rate. It is now considering two capital structures. The two options the company needs to choose from is as follows: Refinance its debt at a lower cost Issue equity and retire its debt The management has decided that it will only do one or the other. Blooms Ltd. management recently reported adhering to a target capital structure. The company has the following target: a debt ratio of 50%. The book debt ratio is however 20% on total assets of R1 million. If the company recently had net profits of R50 000, what was is the company's ROE? A. 6.25% B. 5.15% C. 10.00% D. 12.25%