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Problem:

If a company decides to increase its ratio of total debt / total assets from 30% to 50% as a means of increasing its return on equity (ROE), and it is able to maintain a 4.5% return on assets(ROA),

Required:

Question 1: What will be the new return on equity (ROE) after it has increased its debt level? Please illustrate out all steps in detail and provide all workings out and methods.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146775

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