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 4.5% return on assets(ROA), what will be the new return on equity (ROE) after it has increased its debt level?
Please give a solution with the details (formulas).
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Pricing And Liquidity Of Complex And Structured Derivatives
Authors: Mathias Schmidt
1st Edition
3319459694, 978-3319459691
