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Problem 4.14 Return on Equity) Question 18 of 20 Check My Work (3 remaining) eftook Problem Walk-Through Pacific Packaging's ROE last year was only 2%,
Problem 4.14 Return on Equity) Question 18 of 20 Check My Work (3 remaining) eftook Problem Walk-Through Pacific Packaging's ROE last year was only 2%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which will result in annual interest charges of $540,000. The firm has no plans to use preferred stock and total assets equal total invested capital Management projects an EBIT of $1,056,000 on sales of $12,000,000, and it expects to have a total assets turnover ratio of 3.2. Under these conditions, the tax rate will be 25%. If the changes are made, what will be the company's return on equity? Do not round Intermediate calculations. Round your answer to two decimal places
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