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Digital Press and Book Publishers Ltd had the following balance sheets as at Dec. 31,2012 EBIT for both firms =$30M and tax rate is 40%
Digital Press and Book Publishers Ltd had the following balance sheets as at Dec. 31,2012 EBIT for both firms =$30M and tax rate is 40% What is the ROE for each firm if interest rate on current liabilities is 10% and the rate on LT debt is 13% If ST rate rises to 20% and LT rate rises to 16% but the rate on existing LT debt remains unchanged. What would the ROE for Digital Press and Book Publishers Ltd be. Which firm is in a riskier position? Why
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