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Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt--HD has more debt and pays

Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt--HD has more debt and pays a higher interest rate on that debt. Based on the data given below, what is the difference between the two firms' ROEs?

Applicable to Both Firms Firm HD's Assets $300 Debt EBIT $60 Tax rate 35%

Firms HD Data- Debt Ratio 50% Interest Rate 12%

Firms LD's Data-Debt Ration 30% Interest Rate 10%

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