If a retailer with an ROA of 7.0 percent decides to increase its financial leverage ratio from 1.5 times to 2.0 times, which of the following results will occur?
a. The retailer's ROA will increase by 33 percent.
b. The retailer's RONW will decrease by 33 percent.
c. The retailer's RONW will go from 10.5 percent to 14.0 percent.
d. The retailer's RONW will increase by .5 percent.
e. The retailer's RONW will increase by 10.5 percent.
Answer: C