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Suppose Beer's management concluded that it has $500 of redundant assets that it could sell for $500, which would be used to reduce common equity.
Suppose Beer's management concluded that it has $500 of redundant assets that it could sell for $500, which would be used to reduce common equity. None of the income statement items would be affected, its total current liabilities will remain at $250, and its long-term debt will remain at $950. Beer's capital structure consists of only debt and common equity. After this change, using the DuPont equation what would be Beer's forecasted ROE? Round the ROE to the nearest whole percent. a. 25% b. 28% c. 32% d. 35% e. 40%
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