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eBook Commonwealth Construction (CC) needs $3 million of assets to get started, and it expects to have a basic earning power ratio of 20%. CC
eBook Commonwealth Construction (CC) needs $3 million of assets to get started, and it expects to have a basic earning power ratio of 20%. CC w w w com will be operating income. If it so chooses, CC can finance up to 40% of its assets with debt, which will have a 125 interest rate. I chose to set the form a only debt and common equity, so no preferred stock will be used. Assuming a 25% tax rate on taxable income, what is the difference between expected ROE Trans these assets with 40% debt versus its expected ROE if it finances these assets entirely with common stock? Round your answer to two decimal places percentage points Save Conti
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