Firms HD and LD Are Identical Except for Their Use

Multiple Choice

Firms HD and LD are identical except for their use of debt and the interest rates they pay⎯HD has more debt and thus must pay a higher interest rate.Based on the data given below,how much higher or lower will HD's ROE be versus that of LD,i.e.,what is ROE_HD − ROE_LD?

A) 5.41%
B) 5.69%
C) 5.99%
D) 6.29%
E) 6.61%