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A firm has an ROE of 3.9%, a debt-to-equity ratio of 0.8, and a tax rate...

A firm has an ROE of 3.9%, a debt-to-equity ratio of 0.8, and a tax rate of 40% and pays an interest rate of 7% on its debt. What is its operating ROA? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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Answer #1

The below expression can be used to calculate ROA:

ROA is 6.72%.

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