Two companies both have $100 million in total assets and a 10 percent return on assets (ROA). Each company has a 40 percent tax rate. The first has a higher debt ratio and thus higher interest expense. Which of the following can you conclude? A. Both have the same basic earning power (BEP). B. The first has a higher return on equity (ROE). C. The second has a higher level of operating income (EBIT). D. All of the statements are correct