Gatwick Ltd. has after tax profits (net income) of $500,000 and no debt.The owners have a $6million investment in the business.If they borrow $2 million at 10% and use it to retire stock, how willthe return on their investment (equity) change if earnings before interest and taxes remains the same?Assume a flat 40% tax rate and that the loan reduces equity dollar for dollar.A business owners returnon investment or equity is ROI=ROE=Net Income/Equity