Fast Track Inc.is in the process of acquiring another business.In light of the acquisition,shareholders are currently re-evaluating the appropriateness of the firm's capital structure (the types of and relative levels of debt and equity).The two proposals being contemplated are detailed below:
Requirements:
a.Calculate the estimated return on equity (ROE)under the two proposals.(ROE ~ net income after taxes / market value of equity; net income after taxes = (EBIT - interest on long-term debt)× (I - tax rate).)
b.Which proposal will generate the higher estimated ROE?
Definitions:
Overt Child Abuse
Open and observable acts of physical, emotional, or sexual mistreatment or neglect of a child.
Home Health Nurse
A registered nurse who provides healthcare services to patients in their homes, including post-operative care, chronic illness management, and rehabilitative services.
Libel
A form of defamation expressed through written, printed, or other permanent forms, wrongly harming a person's reputation.
Slander
The act of making false spoken statements damaging to a person's reputation.
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