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Confu Inc. expects to have the following data during the coming year. The company is small, so it is not subject to the interest deduction

Confu Inc. expects to have the following data during the coming year. The company is small, so it is not subject to the interest deduction limitation. What is the firm's expected ROE?

Capital	$174,000	Interest rate	4%
Debt/Capital, book value	65%	Tax rate	25%
EBIT	$34,000

a. 34.44%

b. 48.40%

c. 36.30%

d. 19.55%

e. 38.87%

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