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If a firm has a positive tax rate and a positive operating ROA, and the interest rate on debt is greater than the operating ROA,

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If a firm has a positive tax rate and a positive operating ROA, and the interest rate on debt is greater than the operating ROA, then operating ROA will be greater than zero, but it is impossible to determine how operating ROA will compare to ROE OA equal to ROE OB greater than ROE . less than ROE OD

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