For firm XYZ in the previous problem, suppose the firm's business risk is defined in terms of (ROA), and (ROA)=19%. Assuming that the debt is default-free, compute (ROE)
(ROE)
a. 19.000%
b. 24.325%
c. 30.875%
d. 49.400%
FORMULA: (ROE)= (ROA)[TA/BEQ]
C
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