Vischer Concrete has $2 million in assets that are currently financed with 100% equity. Vischer's EBIT is $300,000, and its tax rate is 30%. If Vischer changes its capital structure (recapitalizes) to include 40% debt, what is Vischer's ROE before and after the change? Assume that the interest rate on debt is 5%.
　ROE at 100% equity　　　ROE at 60% equity

A.17.5%　　　　　　　　26.8%

B.25.0%　　　　　　　　26.8%

C.25.0%　　　　　　　　37.5%