6 points 17. Silver Company and Gold Company have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt. Both firms finance using only debt and common equity, and total assets equal total invested capital. However, Gold Company has a higher total-debt-to-total-capital ratio. Which of the following statements is correct? O Given this information, Silver Company must have the higher ROE. Gold Company has a higher basic earning power ratio (BEP). If the interest rate that the companies pay on their debt is less than their basic earning power (BEP), then Gold Company will have the higher return on common equity (ROE) if the interest rate that the companies pay on their debt is more than their basic O earning power (BEP), then Gold Company will have the higher return on common equity (ROE). None of the above i 10. Gerona Company has $32,000,000 of sales, $17,500,000 of operating 5 points costs (excluding depreciation), and $5,000,000 of depreciation. It has $9,000,000 of bonds outstanding that carry a 6% interest rate, and its federal-plus-state income tax rate is 40%. What is the amount of the company's operating income? * $3,797,840 $5,376,000 $9,500,000 $14,500,000 None of the above 11. Poroma Company has $720,000 of assets (which equal total invested