This year Chester achieved an ROE of 12.0%. Suppose the Board of Directors of Chester mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE? Select: 1 Chester ROE will increase. Chester ROE will decrease. Chester ROE will remain the same.

Please explain how. I believe C but unsure.