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ROE and ROIC Hilyard Industries net income is $27,000, its interest expense is $5,000, and its tax rate is 45%. Its notes pa

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Answer #1

ROE = Net Income/Total equity

ROE = 27,000/225,000

ROE = 12.00%

ROIC = NOPAT/(Debt + Equity)

NOPAT = (1 - 0.45)([27,000/(1 - 0.45)] + 5,000) = $29,750

ROIC = 29,750/(225,000 + 26,000 + 80,000)

ROIC = 8.99%

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