Question: Company A has a total asset value of $ 1 0 million, financed with $ 2 million in debt and $ 8 million in equity.
Company A has a total asset value of $ million, financed with $ million in debt and $ million in equity. Company B has a total asset value of $ million, financed with $ million in debt and $ million in equity. Both companies have an operating income of $ million. Assuming a corporate tax rate of and an interest rate of on debt, the difference between the Return on Equity ROE between company A and company B is closest to
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