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4. Consider the following financial information for the companies below. Assume all assets are used solely for operations and all liabilities to be interest-bearing. Wayne

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4. Consider the following financial information for the companies below. Assume all assets are used solely for operations and all liabilities to be interest-bearing. Wayne Enterprises ($) Luthor Corp ($) Total Assets 15,000,000 10,000,000 5,000,000 Total Equity 10,000,000 Interest Expense 280,000 500,000 Net Income 850,000 1,200,000 Revenue 8,200,00 14,185,000 Required: Calculate the ratios for each company using the template provided in the next two pages. Decompose the ROE into its individual components using both the traditional and alternative approaches covered in weeks 4 & 5 of lectures. Ignore tax effects. [20 MARKS] 4. Consider the following financial information for the companies below. Assume all assets are used solely for operations and all liabilities to be interest-bearing. Wayne Enterprises ($) Luthor Corp ($) Total Assets 15,000,000 10,000,000 5,000,000 Total Equity 10,000,000 Interest Expense 280,000 500,000 Net Income 850,000 1,200,000 Revenue 8,200,00 14,185,000 Required: Calculate the ratios for each company using the template provided in the next two pages. Decompose the ROE into its individual components using both the traditional and alternative approaches covered in weeks 4 & 5 of lectures. Ignore tax effects. [20 MARKS]

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