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%