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ABC Inc. has $2 million in assets, $100,000 of EBIT, and a 25% tax rate. ABC has a debt/assets ratio of 40% and pays 4%

ABC Inc. has $2 million in assets, $100,000 of EBIT, and a 25% tax rate. ABC has a debt/assets ratio of 40% and pays 4% interest on its debt. What is ABCs return on equity? (10 points)

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