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I only need the ROA for NoEquity inc. The answer is NOT 15.17% or 17.17%. i have tried both, and neither worked. Problem 2-19 Debt
I only need the ROA for NoEquity inc. The answer is NOT 15.17% or 17.17%. i have tried both, and neither worked.
Problem 2-19 Debt versus Equity Financing (LG2-1) You are considering a stock investment in one of two firms (NoEquity, Incorporated, and NoDebt, Incorporated), both of which operate in the same industry and have identical EBITDA of $39.5 million and operating income of $14.5 million. NoEquity, Incorporated. finances its $50 milition in assets with $49 milion in debt (on which it pays 10 percent interest annually) and $1 inilion in equity, NoDebt, Incorporated, finances its $50 million in assets with no debt and $50 million in equity. Both firms pay a tax rate of 21 percent on their taxable income. Calculate the net income and retuen on assets-funders' investments-for the two firms: Note: Enter your dollar answers in millions of dollars. Round "Net income" answers to 3 decimal places and "Return on assets" answers to 2 decimal places Step by Step Solution
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