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ABC Corporation has sales of $5,000, assets of $2,500, a debt ratio of 30 percent, and an ROE of 15 percent. XYZ Corporation has the
ABC Corporation has sales of $5,000, assets of $2,500, a debt ratio of 30 percent, and an ROE of 15 percent. XYZ Corporation has the same sales, assets, and net income, but its ROE is 25 percent. What is XYZ's debt ratio? (Hint: Begin by looking at the Du Pont equation or Balance sheet)
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