Question
If a company decides to increase its ratio of total debt / total assets from 30% to 50% as a means of increasing its return
If a company decides to increase its ratio of total debt / total assets from 30% to 50% as a means of increasing its return on equity (ROE), and it is able to maintain a 7.5% return on assets(ROA), what is the return on equity (ROE) with the two different total debt/total asset ratios?
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International Financial Management
Authors: Jeff Madura, Roland Fox
5th Edition
1473770505, 978-1473770508
