Hi there! I'm stuck with the question below. Please help explain why the ANSWER IS D

25. In the year 2005, Dew Pond Co. had sales of $40.5 million. The book value of its total assets was $135 million, and its debtequity ratio was 0.6. Sixty percent of sales revenues were expensed due to administrative and sales expenses, while depreciation constituted 8% of total assets. In addition, the firm paid 5% interest on its total debt. If Dew Pond's corporate tax rate was 40%, what was the return on its equity? A. 5% B. 4% C. 3% D. 2% E. 1%