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    Return on equity

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    Company has the following characteristics:

    Sales $1,000

    Total Assets $2,000

    Total Debt/Total Assets 35%

    EBIT $200

    Tax Rate 40%

    Interest Rate on Total Debt 5 %

    What is Amer's ROE % ?

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    Solution Preview

    ROE = Net Income/Total Equity
    From the given details we calculate the net income and total equity

    Total ...

    Solution Summary

    The solution explains how to calculate ROE