You plan to invest in one of two home delivery companies, Bobs Guaranteed Delivery and Django's Direct Service, that were recently founded and are about to commence operations. They are identical except for their use of debt (wd) and the interest rates on their debt.

1. Calculate the Return on Equity for Bob's. [ Select ] ["17.25%", "14.67%", "23%"]

2. Calculate the Return on Equity for Django's. [ Select ] ["23%", "14.67%", "17.25%"]

3. Which is the better investment? [ Select ] ["Django", "They have the same ROE", "Bob"]

Bob's Data Both Firms Capital $3,000,000 EBIT $500,000 Wd Interest. rate 75% 12% Django's Data Wd 25% Interest rate 8% Tax Rate 25%