Question: Last year Jandik Corp. had $ 2 8 0 , 0 0 0 of assets ( which is equal to its total invested capital )
Last year Jandik Corp. had $ of assets which is equal to its total invested capital $ of net income, and a debttototalcapital ratio of Now suppose the new CFO convinces the president to increase the debttototalcapital ratio to Sales, total assets, and total invested capital will not be affected, but interest expenses would increase. However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged. By how much would the change in the capital structure improve the ROE? Do not round your intermediate calculations.
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