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P1315 MODIGLIANI & MILLER PROPOSITIONS A certain firm with no debt that operates in perfect capital markets currently generates a 7.5% return for its shareholders

P1315 MODIGLIANI & MILLER PROPOSITIONS A certain firm with no debt that operates in perfect capital markets currently generates a 7.5% return for its shareholders and can issue debt at a cost of 5%. Determine the firms ROE at the following debt-to-equity ratios: 0.5, 1.0, and 1.5. Show Calculations:

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