The sales of Rajan Fashion Ltd. during 2019 were $400 million. Its total assets amounted to $250 million. The net profit margin was 4% of sales, the debt-equity ratio of 1.0 and the plowback (or retention) ratio was 30%. For 2019, calculate for Rajan Fashions: (a) The debt and equity levels, and (b) The Dupont system of financial ratios to obtain the rate of return on equity. (c) The sustainable growth rate. Suppose now that in 2020, everything else remained the same as in 2019 (that is, sales, total assets, the net profit margin and plowback ratio did not change) but Rajan Fashions raised its debt equity ratio to 1.8 from 1.0. Calculate the percentage increase in ROE between 2019 and 2020. Is it desirable to raise ROE by raising the debt level ? Comment