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Russell Securities has $100 million in total assets and its corporate tax rate is 40 percent. The company recently reported that its basic earning power (BEP) ratio was 15 percent and that its return on
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Russell Securities has $100 million in total assets and its corporate tax rate is 40 percent. The company recently reported that its basic earning power (BEP) ratio was 15 percent and that its return on assets (ROA) was 9 percent. What was the company's interest expense?

a. $0
b. $2,000,000
c. $6,000,000
d. $15,000,000
e. $18,000,000

User Jason Harrelson
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25 votes
25 votes
Russell Securities has $100 million in total assets and its corporate tax rate is 40 percent. The company recently reported that its basic earning power (BEP) ratio was 15 percent and its return on assets (ROA) was 9 percent. What was the company's interest expense? EBIT = $15,000,000.

Answer d.

If it’s not correct then I’m sorry
User Biron
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