Help! Why is this the correct answer?

https://preview.redd.it/x8dxjbtwbwbe1.png?width=1727&format=png&auto=webp&s=0b7770456d43857cc9e14af8166fac6e094e941c

Guessed on this. Confused because it asks for the RoE AFTER refinancing, but in the explanation they use the S/E found through the old debt ratio of 0.4 instead of 0.5?