1.You are given the following information about a firm: The growth rate equals 8 percent; return on assets (ROA) is 10 percent; the debt ratio is 20 percent; and the stock is selling at $36. What is the return on equity (ROE)?

a.

14.0%

b.

12.5%

c.

15.0%

d.

2.5%

e.

13.5%

Answer Key says B but I don't know why. Explain please