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6. Use the information below to calculate the ROE for Vandelay Industries at different interest rates (cost of debt). SHOW YOUR WORK. (3 pts. each)

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6. Use the information below to calculate the ROE for Vandelay Industries at different interest rates (cost of debt). SHOW YOUR WORK. (3 pts. each) Total Assets $1,000,000 Debt-to-Equity Ratio (D/E) 1.5 Return on Assets (ROA) 10.0% a r= 6.0% ROE = answer here b r= 8.0% ROE answer here r = 10.0% ROE = answer herg d - 12.0% ROE = answer here Hints 1. Use the DuPont formula for ROE 2. You will need to find the leverage multiplier (A/E). This value is the same for parts a through d. 3. You will need to calculate interest expenses to get the interest/asset ratio. Note that interest expenses will differ for each part since the interest rate changes. Space to show work Leverage Multiplier (LM) Interest Expense ($) b d Interest Expense/Asset Ratio b 6. Use the information below to calculate the ROE for Vandelay Industries at different interest rates (cost of debt). SHOW YOUR WORK. (3 pts. each) Total Assets $1,000,000 Debt-to-Equity Ratio (D/E) 1.5 Return on Assets (ROA) 10.0% a r= 6.0% ROE = answer here b r= 8.0% ROE answer here r = 10.0% ROE = answer herg d - 12.0% ROE = answer here Hints 1. Use the DuPont formula for ROE 2. You will need to find the leverage multiplier (A/E). This value is the same for parts a through d. 3. You will need to calculate interest expenses to get the interest/asset ratio. Note that interest expenses will differ for each part since the interest rate changes. Space to show work Leverage Multiplier (LM) Interest Expense ($) b d Interest Expense/Asset Ratio b

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