Company A and Company B have the same tax rate, the same total assets, and the same basic earning power. Both companies have a basic earning power that exceeds their before tax costs of debt. However, Company A has a higher debt ratio. Which of the following statements is correct?
a. Company A has higher net income than company B
b. Company B has a lower ROA than Company A
c. Company A has higher ROE than company B
d. Company B has a lower WACC than Company A