Company X and Company Y are identical firms in all respects except for their capital structure. Company X is all-equity financed with $600,000 in stock. Company Y uses both stock and perpetual debt; its stock is worth $400,000 and the interest rate on its debt is 15%. Both firms expect EBIT to be $150,000. The tax rate is 35%. Jane Doe owns $50,000 worth of XYZs stock. What rate of return is she expecting?

A) 14.4%

B) 15.6%

C) 16.3%

D) 18.7%

E) 19.5%