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An investor with a leverage ratio of 10 has a cost of debt of 4%pa and...

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Finance

An investor with a leverage ratio of 10 has a cost of debt of4%pa and is able to buy a portfolio of shares with a yield of 6%.What are the investor's ROA and ROE? (The correct answer is ROA =2.4%; ROE = 24%)

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An investor with a leverage ratio of 10 has a cost of debt of4%pa and is able to buy a portfolio of shares with a yield of 6%.What are the investor's ROA and ROE? (The correct answer is ROA =2.4%; ROE = 24%)

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