Question 6:

XYZ Corp. Capital Structure Analysis

Balance Sheet Items (in millions)

• Total Assets: $500
• Total Liabilities: $300
• Shareholders' Equity: $200

Income Statement Items

• Net Income: $50
• Interest Expense: $10

Requirements:

1. Calculate the Debt-to-Equity Ratio.
2. Determine the Return on Equity (ROE).
3. Calculate the Return on Assets (ROA).
4. Assess the financial leverage of the company.