Question: Answer the questions below based on the following information. The tax rate is 40%, and all dollars are in millions. Assume that the companies have

Answer the questions below based on the following information. The tax rate is 40%, and all dollars are in millions. Assume that the companies have no liabilities other than the debt shown below. (Show your calculation + Interpretation word limit is 150-200 words)

Twitter Inc. Meta Corp.

Earnings before interest and taxes $ 300 $ 350

Debt (at 10% interest) $ 130 $ 750

Equity $ 310 $ 250

a. Calculate each companys ROE, ROA.

b. Why is Twitters ROE so much higher than Metas? Does this mean Runrun is a better company? Why or why not?

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