[单选题]

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%

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