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Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall
Edition 11ISBN: 978-1259535314Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall
Edition 11ISBN: 978-1259535314 Exercise 17
Financial leverage A firm issues long-term debt with an effective interest rate of 10%, and the proceeds of this debt issue can be invested to earn an ROI of 12%. What effect will this financial leverage have on the firm's ROE relative to having the same amount of funds invested by the owners/stockholders?
Explanation
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Financial leverage :
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Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall
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