Transcribed image text: Attempts: Keep the Highest: /0.5 11. Problem 4.14 (Return on Equity) 1 Problem Walk-Through
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Transcribed image text: Attempts: Keep the Highest: /0.5 11. Problem 4.14 (Return on Equity) 1 Problem Walk-Through Pacific Packaging's ROE last year was only 6%, but its management has developed a new operating plan that calls for a debt-to-capital ratio of 60%, which will resu annual interest charges of $627,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $2,261,000 on sales of $19,000,000, and expects to have a total assets turnover ratio of 1.4. Under these conditions, the tax rate will be 25%. If the changes are made, what will be the company's return on equity? Do not round intermediate calculations. Round your answer to two decimal places. % Grade it Now Save & Continue Continue without saving
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