A Firm Has EBIT of $15 Million,interest Expense of $1

question 2

Multiple Choice

A firm has EBIT of $15 million,interest expense of $1 million,and pays taxes of $4 million.The firm has a market-to-book ratio of 5.75.If the firm has 30 million shares outstanding at a current price of $12 per share,what is its ROE?

• A)24%
• B)2.8%
• C)16%
• D)4.2%
• E)18%

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Definitions:

Cycle Billing

A billing practice where customers' bills are produced at different times during the month based on a predetermined schedule or cycle.

Collection Agency Transaction

The process or action where a business specializing in collecting debts manages or conducts a financial operation, usually the collection of overdue accounts.

Cycle Billing

Cycle Billing is a process where bills are generated for different groups of customers at various times during the month, rather than all at once.

Monthly Billing

A billing system where charges for services or goods are invoiced or billed on a monthly basis.