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Company A has sales of $1,800, assets of $600, a debt ratio of 40 percent, and an ROE of 15 percent. Company B has the
Company A has sales of $1,800, assets of $600, a debt ratio of 40 percent, and an ROE of 15 percent. Company B has the same sales, assets, and net income, but its ROE is 30 percent. What is B's debt ratio? (Hint: Begin by looking at the Du Pont equation.)
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