Question: A small corporation is considering a bond issue. The amount of stockholders' equity is $250,000. The corporation projects income before bond interest and taxes of

A small corporation is considering a bond issue. The amount of stockholders' equity is $250,000. The corporation projects income before bond interest and taxes of $60,000. The corporate income tax rate is 20 percent. If $125,000 of bonds is issued at 10 percent, what is the rate of profit on stockholders' equity

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