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Compute the return on ordinary shareholders funds

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Question - A firm has total assets of $900,000 and total liabilities of $400,000. There are no preference shareholders. Earnings before interest and taxes are $100,000. Interest is $21,000 and taxes are $34,000. Compute the return on ordinary shareholders' funds?

A. 9.0%.

B. 8.0%.

C. 12.5%.

D. 3.8%.

Reference no: EM132526154

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