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Author Question: Last year, Swensen Corp. had sales of $421,800, operating costs of $302,300, and year-end assets of ... (Read 37 times)

parker123

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on: Aug 7, 2023
Last year, Swensen Corp. had sales of $421,800, operating costs of $302,300, and year-end assets of $256,000. The debt-to-total-assets ratio was 30%, the interest rate on the debt was 9%, and the firm’s tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 48% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROE change in response to the change in the capital structure?

◦

11.65%


◦

12.11%


◦

13.50%


◦

14.02%

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by parker123 on Aug 7, 2023

sin

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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parker123

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

dantucker

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Reply 3 on: Yesterday
Excellent

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