Ask Experts Questions for FREE Help !
    kellycarver's Avatar
    kellycarver Posts: 2, Reputation: 1
    New Member

    Nov 3, 2008, 12:47 PM
    Sales $300,000, cost $265,000, year end of $2000,00 effect on ROE if 60% dbt ratio
    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?
    leeandra1's Avatar
    leeandra1 Posts: 2, Reputation: 1
    New Member

    Jul 7, 2010, 05:13 AM
    Youshoul have a balanced of165000 after deducting 35000 of calculations

Not your question? Ask your question View similar questions


Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.

Check out some similar questions!

Percent of cost of sales to sales [ 1 Answers ]

How do I find the percent of cost of sales to sales.

Sales Price per unit, contribution margin ratio [ 1 Answers ]

Having a problem with finding a sales price per unit.

Effect of current ratio [ 2 Answers ]

Assume you work with the CFO of Fashions First, Inc. She reminds you that the fiscal year-end is only two weeks away and that she is looking to you to ensure the company stays in compliance with its loan covenant to maintain a current ratio of 1.25 or higher. A review of the general ledger...

Sales to close ratio [ 3 Answers ]

How can I determine a sales call to close ratio?

Amex's effect on available credit ratio? [ 7 Answers ]

I use an American Express card for all my living expenses and pay it off in full every month. I spend about the same each month, so my current balance always about the same. The card has no set limit. I'm rebuilding my credit, monitor my score often, and plan on applying for a mortgage soon ...

View more questions Search