what is the firm ROE, If Gumby pays 10% interest to

what is the firm ROE

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Reference no: EM131989837

Gumby, Inc. has total assets of $1,000,000 and a debt-to-equity ratio of 3/7. Currently it has sales of $2,500,000, total costs (including depreciation) of $1,000,000, and EBIT of $50,000. If Gumby pays 10% interest to debtholders, and the corporate tax rate is 42%, then what is the firm's ROE.

Reference no: EM131989837

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