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0. Last year Swensen Corp. had sales of $500,000, operating costs of $285,000, and year-end assets of $300,000. The company had accounts payable and accruals

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0. Last year Swensen Corp. had sales of $500,000, operating costs of $285,000, and year-end assets of $300,000. The company had accounts payable and accruals of $20,000, no short-term debt, and no preferred stocks. The debt-to-total-assets ratio was 30%, the interest rate on the debt was 7%, and the firm's tax rate was 20%. The new CFO wants to see how the ROE would have been affected if the firm had used a 45% debt ratio. Assume that sales, total assets, accounts payable and accruals would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROP change in response to the change in the capital structure

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