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Suppose Firms A and B have the same amount of assets, pay the same interest rate on their debt, have the same basic earning power

Suppose Firms A and B have the same amount of assets, pay the same interest rate on their debt, have the same basic earning power (BEP), and have the same tax rate. However, Firm A has a higher debt ratio. If BEP is greater than the interest rate on debt, Will firm A have a higher ROE as a result of its higher debt ratio? Why?

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