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What is the levered ROE

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Question - Jones June Bee's is currently unlevered with assets valued at $10,000. The company is considering changing its capital structure to 40% debt / 60% equity. If the company's EBIT is $4000, its cost of debt is 5%, and its tax rate is 35%, what is the levered ROE? Assume that the value of the firm does not change with the leverage.

Reference no: EM133025769

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