Firm A uses debt and has $560 in equity. Firm B does not use debt and has $1,030 in equity. Both firms pay 39% tax rate and both firms have EBIT of $55. Firm A has interest expense of $31. There are no other expenses. If EBIT doubles for both firms, ROE for firm A will be ______; ROE for firm B will be _______

a) 7.99%; 5.9% b) 8.39%; 6.40% c) 9.09%; 7.20% d) 8.60%; 6.51%

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