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4. Sue Firm's net income is $25,000, its interest expenses is $5,000, and its tax rate is 40%. Its notes payable equals $30,000, long-term debt
4. Sue Firm's net income is $25,000, its interest expenses is $5,000, and its tax rate is 40%. Its notes payable equals $30,000, long-term debt equals $80,000, and common equity equals $250,000. The firm finance with only debt and common equity, so it has no preferred stock. What are the firms return on equity (ROE) and return on invested capital (ROIC)? Show work
A. ROE is 10% and ROIC is 7.77%
B. ROE is 8% and ROIC is 8.20%
C. ROE is 9% and ROIC is 8%
D. ROE is 8.22% and ROIC is 10%
E. ROE is 6.99 and ROIC is 8%
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