Tapley Dental Supply Company has the following data:

Net Income = $240 Sales = $10,000 Total assets = $6,000

Debt ratio = 75% TIE ratio = 2.0 Current ratio = 1.2

BEP ratio = 13.33%

If Tapley could streamline operations, cut operating costs, and raise net income to $300, without affecting sales or the balance sheet (the additional profits will be paid out as dividends), by how much would its ROE increase?

a. 3.00%

b. 3.50%

c. 4.00%

d. 4.25%

e. 5.50%