Modigliani & Miller Propositions A certain firm with no debt that operates in perfect capital

markets currently generates a return of $8\mathrm{.}5\%$ for its shareholders and can issue debt at a cost of

$3\mathrm{.}5\%.$ Determine the firm's ROE at the following debt$-$to$-$equity ratios: $0\mathrm{.}5,1\mathrm{.}0,$ and $1\mathrm{.}5.$

The firm's required return on equity at the debt$-$to$-$equity ratio of $0\mathrm{.}5$ is

decimal place.$)$

The firm's required return on equity at the debt$-$to$-$equity ratio of $1\mathrm{.}0$ is

decimal place.$)$

The firm's required return on equity at the debt$-$to$-$equity ratio of $1\mathrm{.}5$ is

decimal place.$)$

$\%.($Round to two

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