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Adams operates his $55000 firm using his own equity. Bob operates his firm with $27500 of his own money plus $27500 of debt at a
Adams operates his $55000 firm using his own equity. Bob operates his firm with $27500 of his own money plus $27500 of debt at a cost of 10 percent interest. Calculate Adams's and Bob's return on equity if their respective businesses produce earnings before interest and tax of $7500. 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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