Question 40 (1.5 points) The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets Cash and securities Accounts receivable Inventories Total current assets Net plant and equipment Total assets Liabilities and Equity Accounts payable Acals Notes payable Total current liabilities 2016 $2,145 8,970 12,480 $23,595 $15.405 $39,000 $7,410 4,290 5,460 $17,160 $7,800 $24,960 $5,460 8,580 $14,040 Long-term bonds Total liabilities Common stock Retained earnings Total common cquity Total liabilities and equity $39,000 Income Statement (Millions of $) Net sales Operating costs except depreciation Depreciation Eamings before interest and taxes (EBIT) Less interest IPaminor before taxes (ERT 2016 $58,500 54,698 1,024 $2,779 829 Eamings betore interest and taxes (EBIT) Less interest Earnings before taxes (EBT) Taxes Net income $2,779| 829 $1,950 683 $1,268 Other data: Shares outstanding (millions) Common dividends (millions of $) Int rate on notes payable & L-T bonds Federal plus state income tax rate Year-end stock price 500.00 $443.63 6.25% 35% $30.42 What is the firm's ROE? Do not round your intermediate calculations. 12 O 9.034 15 10.02% 18 7.58% O7.764 21 7.49% 19