Sherry Corp has a return on assets ratio of 12%. It plans to issue bonds at 8%

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Sherry Corp has a return on assets ratio of 12%. It plans to issue bonds at 8% and use the cash to retire debt. What effect will this have on its debt to total assets ratio and on its return on common stock- holders' equity?

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Financial Accounting Tools For Business Decision Making

ISBN: 9780471691952

3rd Edition

Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

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