Jones June Bee S Is Currently Unlevered With Assets Valued At 10 000 The Company (1)

Jones June Bee’s is currently unlevered with assets valued at $10,000. The company is considering changing its capital structure to 40% debt / 60% equity. If the company’s EBIT is $4000, its cost of debt is 5%, and its tax rate is 35%, what is the levered ROE? Assume that the value of the firm does not change with the leverage.

Please answer using percentage format and round the nearest whole number (for example if your answer is 25%, enter only 25)

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