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Return on equity Midwest Packaging’s ROE last year was only 3 percent but its management has developed a new operating plan that calls for a total

Return on equity Midwest Packaging’s ROE last year was only 3 percent, but its management has developed a new operating plan that calls for a total debt ratio of 60 percent, which will result in annual interest charges of $300,000. Management projects an EBIT of $1, 0,000,000, and it expects to have a total assets turnover ratio of 2.0. Under these conditions, tax rate will be 34 percent. If the changes are made, what will be its return on equity?

May 17 2020 View more View Less

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