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Skynet has equity with a market value of $1. 2 billion and debt with a value of $600 million. Skynet’s ROA is 12% and its cost of debt is 7%. What is Skynet’s Return on Equity? Assume Skynet’s tax rate
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Skynet has equity with a market value of $1. 2 billion and debt with a value of $600 million. Skynet’s ROA is 12% and its cost of debt is 7%. What is Skynet’s Return on Equity? Assume Skynet’s tax rate is 28%.

10. 2%


12. 0%


12. 7%


13. 8%


14. 5%

User Yndolok
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7.7k points

1 Answer

1 vote

Answer:

10.2%

Step-by-step explanation:

The correct answer is 10.2%.

User Guy Yogev
by
7.6k points
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