Question
ABC Corp's capital structure is 60% equity and 40% debt.Based on the following data, what is thestandard deviation of ROE(return on equity)? Assets $50,000,EBIT $3,000
ABC Corp's capital structure is 60% equity and 40% debt.Based on the following data, what is thestandard 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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Contemporary Financial Management
Authors: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
13th edition
1285198840, 978-1285198842
