Your boss, Mr Willian "Mean Guy" Kane, asks you to compute the possible impact of: an increase in leverage on RECs ROE.

Using the Dupont Formula, evaluate the impact on RECs $2007$ ROE if it increased its Leverage Ratio to $3\mathrm{.}0?$

Indicate whether the company's ROE would Increase$/($decrease$)$ by utilizing the increase in leverage $($i$.$e$.$ leverage is the same as debt$)$

Decrease of $9\mathrm{.}1\%$

Decrease of $9\mathrm{.}6\%$

Increase of $9\mathrm{.}6\%$

Increase of $9\mathrm{.}1\%$

None of the choices