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Adams operates his $ 30000 firm using his own equity. Bob operates his firm with $ 15000 of his own money plus $ 15000 of
Adams operates his $30000 firm using his own equity. Bob operates his firm with $15000 of his own money plus $15000 of debt at a cost of 6 percent interest. Calculate Adams's and Bob's return on equity if their respective businesses produce earnings before interest and tax of $6500. Assume perfect markets.
Adams's return on equity: % Bob's return on equity: % Place your answer in percentage form with two decimal places. For example, an answer of eleven point five zero percent would be entered 11.50.
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