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The ROE of X company has fallen to 6 % and the company expects its operating income (EBIT) to be R10 million, while sales revenue
The ROE of X company has fallen to 6 % and the company expects its operating income (EBIT) to be R10 million, while sales revenue is expected to be R60 million for the coming financial year. In addition, the company's asset turnover is expected to be 1.2 times and the company is expected to pay R2 million in interest on debt of R20 million. The company pays corporate tax of 28%. Calculate the company's expected debt: equity ratio
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