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3 years ago

Zero Corp's total common equity at the end of last year was $350,000 and its net income was $70,000. What was its ROE

Business

1 answer:

Arturiano [62]3 years ago

5 0

Answer:

ROE = 20%

Explanation:

Given:

Common equity = $350,000

Net income = $70,000

Find:

ROE

Computation:

ROE = [Net income/Common equity]100

ROE = [$70,000/$350,000]100

ROE = 20%

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Answer:

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Levered value = Unlevered value + (Tax rate × Debt market value)

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