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20. A firm has total assets of $1,000,000 and a debt ratio of 40 percent. Currently, it has sales of $2,500,000, total fixed costs of

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20. A firm has total assets of $1,000,000 and a debt ratio of 40 percent. Currently, it has sales of $2,500,000, total fixed costs of $1,000,000, and EBIT of $50,000. If the firm's before-tax cost of debt is 10 percent and the firm's tax rate is 40 percent, then what is the firm's ROE? 1.7% b. 1.0% 3.0% d. 8.3% a. c

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