Laserscope Inc. is trying to determine the best combination of short-term debt (STD) and long-term debt (LTD) to use to finance its assets. Laserscope will have $16 million in current assets and $20 million in fixed assets next year and expects EBIT to be $4.1 million. The company's tax rate is 40% and its debt-to-asset ratio is 50%. The company's debt will be financed through one of the following policies: Aggressive policy Conservative policy Short-term debt $12 million $6 million Interest rate: Long-term debt 11.0% 10.3% Interest rate: Short-term debt 7.5% 7.0% 

REQUIRED: What is the return on shareholders' equity under each policy?

Answer rating: 100% (QA)

EBIT Interest EBT Tax EAT ROE DebtAsset Ratio T... View the full answer