A company has total assets of $50 million and common shareholders' book equity of $10 million. The firm needs to issue $12 million short term debt and $28 million long term debt. Forecasted sales are $90m and expected EBIT is $8m. Interest on the company's short-term debt is 5% and long-term debt interest is 8%. Current assets are $20m and the tax rate is 30%. What is the firm's return on equity? \begin{tabular}{|r|} \hline 0.2579 \\ \hline 0.3098 \\ \hline 0.3612 \\ \hline 0.4501 \\ \hline \end{tabular} Question 17 (4 points) Which one of the following statements is NOT correct? Under the floating rate system, exchange rates fluctuate due to changes in currency demand. Capital movements due to higher interest rate can affect currency demand under floating rate system. Tracle deficit or surplus can affect currency demand under floating rate system