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a) Bedding is a firm that is financed by both equity and debt, and has total assets of 100 million, 40 million of which
a) Bedding is a firm that is financed by both equity and debt, and has total assets of 100 million, 40 million of which are financed with debt and bear an interest rate of 8%. If earnings before Interest and tax (EBIT) and sales of Bedding are 10 million and 100 million, respectively. What is its ROE? Assume corporate tax rate is 40%.
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Principles of Managerial Finance
Authors: Lawrence J. Gitman, Chad J. Zutter, Wajeeh Elali, Amer Al Roubaix
Arab World Edition
1408271583, 978-1408271582
