Last year Southern Chemicals had sales of $200, assets of $146, a profit margin of 5%, and an equity multiplier of 1.85. The CFO believes that the company could reduce its assets by $20 without affecting either sales or costs. Had it reduced its assets in this amount, and had the liability-to-asset ratio, sales, and costs remained constant, by how much would the ROE have changed?

Select one:

a.2.70%

b.2.62%

c.3.81%

d.2.01%

e.3.01%