Business, 21.05.2020 05:01 ehaynie

Pacific Packaging's ROE last year was only 2%; but its management has developed a new operating plan that calls for a debt-to-capital ratio of 45%, which will result in annual interest charges of $175,000. The firm has no plans to use preferred stock and total assets equal total invested capital. Management projects an EBIT of $535,000 on sales of $5,000,000, and it expects to have a total assets turnover ratio of 2.1. Under these conditions, the tax rate will be 40%. If the changes are made, what will be the company's return on equity

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