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FINANCIAL LEVERAGE EFFECTS

pays only $9\%$ interest on its debt. Neither firm uses preferred stock in its capital structure.

a$.$ Calculate the return on invested capital $($ROIC$)$ for each firm. Round your answers to two decimal places.

ROIC for firm LL is $,\%$

ROIC for firm $HL$ is $,\%$

b$.$ Calculate the rate of return on equity $($ROE$)$ for each firm. Round your answers to two decimal places.

ROE for firm $LLis\%$

ROE for firm $HLis\%$

debt to $15\%.$ Calculate the new ROE for LL$.$ Round your answer to two decimal places.