Click here to read the look: Profitability Ratios Problem Walk-Through RETURN ON EQUITY Pacific Packaging's Roe last year was only 6%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 40%, which will result in annual interest charges of $862,000. The firm has no plans to use preferred stock and total sorts equal total invested capital Management projects an EBIT of $1,295,000 on sales of $18,000,000, and it expects to have a total assets turnover ratio of 2.1. Under these conditions, the tax rate will be 35% Ir the changes are made, what will be the company's return on equity? Do not round intermediate calculations. Round your answer to two decimal places tory Click here to read the eBook: Profitability Ratios RETURN ON EQUITY Commonwealth Construction (CC) needs 53 million of assets to get started, and it expects to have a basic earning power ratio of 15%. CC will own no securities, so all of its income will be operating income. If it so chooses, CC can finance up to 45 of its assets with debt, which will have an 11% interest rate. If it chooses to use debt, the firm will finance using only debt and common equity, so no preferred stock will be used. Assuming = 30% tax rate on all taxable income, what is the difference between CC's expected Roer it finances these assets with 45% debt versus its expected ROE i finances these assets entirely with common stock Round your answer to two decimal places