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Calculate the return on equity

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Question - The net operating income of a company is Sh. 25 million. The company is financed using debt of Sh. 50 million, equity of Sh. 60 million and preference shares of Sh. 10 million. The interest attracts interest at a rate of 6% while the preference dividend is paid at a rate of 8%. The tax rate is 50%. Calculate the return on equity (ROE).

Reference no: EM133088564

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