Question
ABC Corp's capital structure is 60% equity and 40% debt. Based on the following data, what is the standard deviation of ROE(return on equity)? Assets
ABC Corp's capital structure is 60% equity and 40% debt. Based on the following data, what is the standard deviation of ROE(return on equity)?
Assets $50,000, EBIT $3,000 in recession (20% chance of occurring), $6,000 in normal case (50%) and $9,000 in boom (30%)
Interest rate 8%, Tax 40%
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-1259675539, 125967553X, 978-1259594168, 1259594165, 78025796, 978-0078025792
