Question
A company has an expected return on assets of 18%, a debt-to-equity ratio of 50%, an interest rate on debt of 5.75%, and a marginal
A company has an expected return on assets of 18%, a debt-to-equity ratio of 50%, an interest rate on debt of 5.75%, and a marginal tax rate of 35%. What is its expected ROE?
a. 15.68%
b. 12.76%
c. 15.0%
d. 24.12%
please show working, thanks.
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
13th edition
132743469, 978-0132743464
