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A firm has an ROE of 3%, a debt/equity ratio of .5, a tax rate of 35%, and pays an interest rate of 6% on its debt. What is its operating ROA?

A firm has an ROE of 3%, a debt/equity ratio of .5, a tax rate of 35%, and pays an interest rate of 6% on its debt. What is its operating ROA?
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Finance-7941450.doc

Question:
A firm has an ROE of 3%, a debt/equity ratio of .5, a tax rate of 35%, and pays an interest rate
of 6% on its debt. What is its operating ROA?
Solution: Computation of the Operating ROA...

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