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Quigley Inc. b considering two financial plans for the coming year. Management experts sales to be dollar 300,000, operating costs to be dollar 265,000. assets (which is equal to its tool invested capital) to be dollar 200,000, and its tax rate to be 35 percentage. Under Plan A it would finance the firm using 25K debt and 75 percentage common equity. The interest rate on the debt would be 8.8 percentage, but under a contract with existing bondholders the TIE ratio would have to be maintained at or above 5.0. Under Plan B, the maximum debt that mat the TIE constraint would be employed. Assuming that sales, operating costs, assets, total invested capital, the interest rate, and the tax rate would a remain constant, by how much would the ROE change in rwpoase to the change in the capital structure? Do not round your intermediate calculations. 1.85 percentage 1.52 percentage 2.31 percentage 2.03 percentage 1.68 percentage Quigley Inc. b considering two financial plans for the coming year. Management experts sales to be dollar 300,000, operating costs to be dollar 265,000. assets (which is equal to its tool invested capital) to be dollar 200,000, and its tax rate to be 35 percentage. Under Plan A it would finance the firm using 25K debt and 75 percentage common equity. The interest rate on the debt would be 8.8 percentage, but under a contract with existing bondholders the TIE ratio would have to be maintained at or above 5.0. Under Plan B, the maximum debt that mat the TIE constraint would be employed. Assuming that sales, operating costs, assets, total invested capital, the interest rate, and the tax rate would a remain constant, by how much would the ROE change in rwpoase to the change in the capital structure? Do not round your intermediate calculations. 1.85 percentage 1.52 percentage 2.31 percentage 2.03 percentage 1.68 percentage

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