Southwest Physicians, a medical group practice, is just being formed. It will need $2 million of total
assets to generate $3 million in revenues. Furthermore, the group expects to have a profit margin of
5 percent. The group is considering two financing alternatives. First, it can use all-equity financing
by requiring each physician to contribute his or her pro rata share. Alternatively, the practice can
finance up to 50 percent of its assets with a bank loan. Assuming that the debt alternative has no
impact on the expected profit margin, what is the difference between the expected ROE if the group
finances with 50 percent debt versus the expected ROE if it finances entirely with equity capital?

please show equations and calculations for excel or however you solved it.