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Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus must pay

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Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus must pay a higher interest rate. Based on the data given below, calculate Return on Equity for both firms. (2 points) Capital EBIT Tax rate Applicable to Both Firms $5,000 $2500 30% Firm HD's Data w Int. rate 70% 10% Firm LD's Data W, 30% Int. rate 8%

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