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b. Determine the percentage change in return on equity of a 20 percent decrease inexpected EBIT from a base level of $2.5 million with a
b. Determine the percentage change in return on equity of a 20 percent decrease inexpected EBIT from a base level of $2.5 million with a debt-to-total-assets ratio of: with a debt-to-total-assets ratio of: change in return on equity i. % change = 0% ii. % change =20% iii. % change = 40% C. Determine the percentage change in return on equity of a 20 percent increase inexpected EBIT from a base level of $2.5 million with a debt-to-total-assets ratio of: with a debt-to-total-assets ratio of change in return on equity i. % change = 0% ii. % change =+20% iii. % change =+40.0% d. Which leverage ratio yields the highest expected return on equity? e. Which leverage ratio yields the highest variability (risk) in expected return onequity
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