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Assuming a company is offered by its banker a (10% p.a.) loan that would make its previously debtfree capitalization to a 25% debt75% equity capital

Assuming a company is offered by its banker a (10% p.a.) loan that would make its previously debtfree capitalization to a 25% debt75% equity capital structure. Prior to any availment of loan, total assets is at P1.5 million with EBIT of P250,000. Applicable tax rate is 30%. Compute for the ROE after availing the loan.

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