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Debt / Total Assets 0 % 3 0 % 7 0 % Total Assets 2 , 0 0 0 , 0 0 0 2 ,

Debt/Total Assets
0%
30%
70%
Total Assets
2,000,000
2,000,000
2,000,000
Debt
Equity
Total Liabilities and Equity
Operating Income (EBIT)=(Sales Operating Expenses)
300,000
300,000
300,000
Interest Rate on Debt
12%
14%
16%
Interest
Earnings Before Tax (EBT)
Income tax (34%)
Net Income
Return on Equity (ROE)
Calculate the ROE when Debt/Total Assets is 70%.

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