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McDowell's has an ROA of 7% and pays a 8% coupon on its debt. McDowell's has a capital structure that is 70% equity and 30%

McDowell's has an ROA of 7% and pays a 8% coupon on its debt. McDowell's has a capital structure that is 70% equity and 30% debt. Relative to a firm that is 100% equity-financed and has a similar tax rate, McDowell's net profit will be ________, and its ROE will be ________.

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lower; lower

higher; higher

higher; lower

lower; higher

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