Respective businesses produce earnings before interest

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Adams operates his $30000 firm using his own equity. Bob operates his firm with $15000 of his own money plus $15000 of debt at a cost of 12 percent interest. Calculate Adams's and Bob's return on equity if their respective businesses produce earnings before interest and tax of $7000. Assume perfect markets.

Adams's return on equity: %

Bob's return on equity: %

Reference no: EM13972123

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