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Question 4 5 pts A firm has EBIT of $18,500,000.00, total assets of $100,000,000.00, a tax rate of 40 percent, a cost of debt of

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Question 4 5 pts A firm has EBIT of $18,500,000.00, total assets of $100,000,000.00, a tax rate of 40 percent, a cost of debt of 8.0 percent, and a debt/equity ratio of 0.50. As discussed in class, the ROE for a levered firm is also a function of a firm's return on assets (ROA) for an equivalent unlevered firm, plus a leverage effect, plus a tax shelter effect. Given the information above, determine what percentage of the firm's total return on equity arises from the tax shelter effect. 11.23% 10.56 % 10.05% O 11.99 % O 9.33%

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