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7 ROE AND ROIC Baker Industries's net income is $ 2 4 , 0 0 0 , its interest expense is $ 5 , 0

7

ROE AND ROIC Baker Industries's net income is $

24, 000,

its interest expense is $

5, 000,

and its tax rate is

25 % .

Its notes payable equals $

27, 000,

long

-

term debt equals $

75, 000,

and common equity equals $

250, 000 .

The firm finances with only debt and common equity, so it has no preferred stock. What are the firm's ROE and ROIC?

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