Buchholz Corporation follows a moderate current asset investment policy, but it is now considering a change, perhaps to a restricted or maybe to a relaxed policy. The firm's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $35,000; the interest rate on its debt is 10%; and its tax rate is 25%. With a restricted policy, current assets will be 15% of sales, while under a relaxed policy they will be 25% of sales. What is the difference in the projected ROEs between the restricted and relaxed policies? 6.56% 5.32% 5.91% O 7.22% Question 26 5 pts Which of the following is generally NOT true and an advantage of going public? Listing provides a company with some "free" advertising, and it may enhance the firm's prestige and help it do more business. Listing reduces the reporting requirements for firms, because listed firms file reports with the exchange rather than with the SEC. Listing reduces the reporting requirements for firms, because listed firms file reports with the exchange rather than with the SEC. Any firm can be listed on the NYSE if it pays the listing fee Question 27 5 pts Buchholz Corporation follows a moderate current asset investment policy, but it is now considering a change, perhaps to a restricted or maybe to a relaxed policy. The firm's annual sales are $400,000; its fixed assets are $100,000; its target capital structure calls for 50% debt and 50% equity; its EBIT is $35,000; the interest rate on its debt is 10%; and its tax rate is 25%. With a restricted policy, current assets will be 15% of sales, while under a relaxed policy they will be 25% of sales. What is the difference in the projected ROEs between the restricted and relaxed policies? 6.56% 5.32% 5.91% 7.22%