Your firm has $50 million in equity and $30 million in preferred stock outstanding. They have just issued $20 million in new debt at par with a 10% coupon rate. The dividend yield on the preferred stock is 9%. The firm's equity beta is 1.2, the risk free rate is 2%, the expected return on the market is 7%, and the corporate tax rate is 21%. What is the firm's return on assets?

Answer rating: 100% (QA)

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