Question: Need help with Finance Question, read it carefully and check your answer please. Thank you. An all equity firm has a return on assets (ROA)

Need help with Finance Question, read it carefully and check your answer please. Thank you.

Need help with Finance Question, read it carefully and check your answer

An all equity firm has a return on assets (ROA) of 14.20 percent. The firm makes the decision to replace 30% of its equity with debt that has a before-tax cost of 8 percent (the firm's tax rate is 40 percent). Calculate the firm's new ROE after the debt has been issued and equity has been repurchased (hint: leverage effect and tax shield effect). 18.51% 17.94% 17.66% 18.23% 17.37%

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