A property project produces an after-tax return of 8.5% on total funds invested. The investor can borrow funds for this project at 7.5% and the investors marginal tax rate is 35.5%. Assuming an LVR (loan to value ratio) of 60%, the after-tax return on equity is:

Select one:

a.

9.05%.

b.

12.78%.

c.

21.34%.

d.

13.99%.

e.

19.44%.