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SlowMo and speedy Joe have identical businesses except that slow mo has no debt while speedy joes debt equity ratio is 1. Assume that the interest rate is 10% the tax rate is 40% and both have $1000 in assets. At what level of profit before interest and taxes will slow mos after tax return on equity be equal to speedy joes after tax return on equity?

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Financial Management, Finance

Category:- Financial Management
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