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ABC Corporation is analyzing two financial plans for the upcoming year. Management anticipates the followings: 1. Sales Revenue $300,000, 2. operating costs to be $265,000,

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"ABC" Corporation is analyzing two financial plans for the upcoming year. Management anticipates the followings: 1. Sales Revenue $300,000, 2. operating costs to be $265,000, 3.assets (capital) to be $200,000, and 4. its tax rate to be 35%. Under Plan A it would use 25% debt and 75% common equity. The interest rate on the debt would be 8.8%, but under a contract with existing bondholders, the times' interest earned (coverage) ratio would have to be maintained at or above 4.0. Under Plan B, the maximum debt that met the times' interest earned (coverage) ratio constraint would be employed. Assuming that sales, operating costs, assets, the interest rate, and the tax rate would all remain constant: What is the value of ROE under Plan A? What is the value of ROE under Plan B

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