Tuesday
July 29, 2014

Homework Help: Finance

Posted by Anonymous on Saturday, May 8, 2010 at 12:34am.

Last year Charter Corp. had sales of $300,000, operating costs of $265,000, and year-end assets of $200,000. The debt-to-total-assets ratio was 25%, the interest rate on the debt was 10%, and the firm's tax rate was 35%. The new CFO wants to see how the ROE would have been affected if the firm had used a 60% debt ratio. Assume that sales and total assets would not be affected, and that the interest rate and tax rate would both remain constant. By how much would the ROE change in response to the change in the capital structure?

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

finance - Last year Charter Corp. had sales of $300,000, operating costs of $265...
finance - Last year Chart Corp. had sales of $300,000, operating costs of $265,...
Finance - At the beginning of the year Washington had a total assets of $300,000...
Finance - Item Total assets $10,000,000 Total equity (all common) 9,000,000 ...
Finance - Item Total assets $10,000,000 Total equity (all common) 9,000,000 ...
finance - Firm A has $10,000 in assets entirely financed with equity. Firm B ...
Finance - Firm A has $10,000 in assets entirely financed with equity. Firm B ...
accounting - Acme Inc. has total liabilities of $120,000, total sales of $80,000...
accounting - Acme Inc. has total liabilities of $120,000, total sales of $80,000...
Finance - The most recent financial statements for Retro Machine, Inc., follow. ...

Search
Members