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Firm A has a profit margin of 20%, an earnings growth rate of 15%, a total asset turnover ratio of 10%, and has a capital

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Firm A has a profit margin of 20%, an earnings growth rate of 15%, a total asset turnover ratio of 10%, and has a capital structure that is 20% debt. Firm B has a profit margin of 20%, an earnings growth rate of 6%, a total asset turnover ratio of 10% and a capital structure that is 20% equity. Which of the following statements is true? The return on equity is equal for both firms. Firm A has the higher return on equity. Firm B has the higher return on equity. None of the answers listed here

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