Tapley Dental Supply Company Has the Following Data: Net Income

Multiple Choice

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%