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Question: Leveraging Equations (Easy) The following information is from reformulated financial statements (in millions):

a. (1) Calculate the dividends, net of capital contributions, for 2012.

(2) Calculate ROCE for 2012; use average book value in the denominator.

(3) Calculate RNOA for 2012; use the average net operating assets in the denominator.

(4) Supply the numbers for the formula

ROCE =PM x ATO + [Financial leverage x (RNOA - Borrowing cost)]

b. The firm's short-term borrowing rate is 4.5 p ercent after tax. Supply the numbers for the formula

RNOA = ROOA + (OLL EV x OLSPREAD)

c. Repeat the exercise in part (a) using the following information (in millions):

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92299795

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