Duffert Industries has total assets of $910,000 and total current liabilities (consisting only of accounts payable...
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Duffert Industries has total assets of $910,000 and total current liabilities (consisting only of accounts payable and accruals) of $140,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 8% and its tax rate is 25%. The firm's basic earning power ratio is 16% and its debt-to-capital ratio [Long-term debt/(Long-term debt + Common Equity)] is 40%. What are Duffert's ROE and ROIC? Do not round your intermediate calculations. Duffert Industries has total assets of $910,000 and total current liabilities (consisting only of accounts payable and accruals) of $140,000. Duffert finances using only long-term debt and common equity. The interest rate on its debt is 8% and its tax rate is 25%. The firm's basic earning power ratio is 16% and its debt-to-capital ratio [Long-term debt/(Long-term debt + Common Equity)] is 40%. What are Duffert's ROE and ROIC? Do not round your intermediate calculations.
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Answer rating: 100% (QA)
We can use the DuPont identity to calculate the ROE Return on Equity and ROIC Return on Invested Cap... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-1285867977
14th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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