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Commonwealth Construction (CC) needs $2 million of assets to get started, and it expects to have a basic earning power ratio of 15% CC will

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Commonwealth Construction (CC) needs $2 million of assets to get started, and it expects to have a basic earning power ratio of 15% CC will own no securities, so all of its income will be operating income. If it so chooses, CC can finance up to 45% of its assets with debt, which will have an 8% interest rate. If it chooses to use debt, the firm will finance using only debt and common equity, so no preferred stock will be used. Assuming a 30% tax rate on taxable income, what is the difference between C's expected Row if it finances these assets with 45% debt versus is expected ROE if a finances there is entirely with common stock? Round your answer to two decimal places

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