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(5 pt.) Ms Verma has invested 50,00,000 to open a store, out of which she borrowed 10,00,000 from the bank at 5% interest rate p.a.
(5 pt.) Ms Verma has invested 50,00,000 to open a store, out of which she borrowed 10,00,000 from the bank at 5% interest rate p.a. She earned 12,50,000 as profit after interest and taxes. The corporate tax rate is 4%. What is the OCC? She is considering taking a loan of 20,00,000 to expand the business without changing the business risk significantly. What would be her new return to equity if the OCC remains unchanged? (5 pt.) Ms Verma has invested 50,00,000 to open a store, out of which she borrowed 10,00,000 from the bank at 5% interest rate p.a. She earned 12,50,000 as profit after interest and taxes. The corporate tax rate is 4%. What is the OCC? She is considering taking a loan of 20,00,000 to expand the business without changing the business risk significantly. What would be her new return to equity if the OCC remains unchanged
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