A businessman is hoping to get a 20% return on equity after tax. The business generates a

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A businessman is hoping to get a 20% return on equity after tax. The business generates a 3% sales margin (after tax). Provide two possible combinations of financial structure, profitability and capital employed that could lead to the generation of a 20%

return on equity (the cost of borrowing is 5% before tax, the tax rate is 40% and the company’s capital employed is 1000).

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Corporate Finance Theory And Practice

ISBN: 9780470721926

2nd Edition

Authors: Pierre Vernimmen, Pascal Quiry

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