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BuyUS Inc. plans to issue 7%, $400,000, 10-year bonds in order to finance an expansion. The expansion is expected to increase income before interest expense

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BuyUS Inc. plans to issue 7%, $400,000, 10-year bonds in order to finance an expansion. The expansion is expected to increase income before interest expense from $100,000 to $175,000. BuyUS has $1,000,000 in average common equity. Calculate the expected return on common shareholders' equity. (ignore income taxes) 14.7%. 43.8% 57.1%. 07.0%. 20.0%

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