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Firms HD and LD are identical except for their level of debt and the interest...

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Firms HD and LD are identical except for their level of debt and the interest rates they pay on debt--HD has more debt and pays a higher interest rate on that debt. Based on the data given below, what is the difference between the two firms' ROES? Applicable to Both Firms Assets $400 EBIT $60 Tax rate 30% Firm's HD Data Debt Ratio is 50% Interest Rate is 12% Firms' LD Data Debt Ratio is 20% Interest Rate is 8%

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