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As you can calculate, the firm has a current debt ratio ( total liabilities to total assets ) of 2 1 . 8 1 8

As you can calculate, the firm has a current debt ratio (total liabilities to total assets) of
21.818%. If the firm had been able to increase its debt ratio in 2002 to 30 percent, while
maintaining the same level of ROA (for example, it could increase non-interest paying current
liabilities, use the proceeds to reduce equity outstanding, and there would then be no impact
on interest or on ROA), by how much would the ROE have changed?
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