Return on equity-developed new operating plan

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Reference no: EM131502717

RETURN ON EQUITY Pacific Packaging's ROE last year was only 4%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 55%, which wil resut in annual interest charges of $800,000. The firm has no plans to use preferred stock and total assets equal total invested capital. projects an EBIT of o $1,780,000 on sales of $20,000,000, and it expects to have a total assets Management made, what tumover ratio of 2.6. Under these conditions, the tax 30%. irthe changes will be the company's return on equity? Do not round intermediate ane caloulations. Round your answer to two decimalplaces. Check My Work Icon Key

Reference no: EM131502717

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