Answer the questions below based on the following information. The tax rate is 40%, and...
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Answer the questions below based on the following information. The tax rate is 40%, and all dollars are in millions. Assume that the companies have no liabilities other than the debt shown below. (in Millions) Samsung Co. Apple Co. Earnings before interest and taxes $ 750 $ 900 Debt (at 9% interest) $ 250 $ 500 Equity $ 1500 $ 750 a. Calculate each companys ROE, ROA, and ROIC. b. Why is Apples ROE so much higher than Samsungs? Does this mean Apple is a better company? Why or why not? c. Why is Samsungs ROA higher than Apples? What does this tell you about the two companies? d. How do the two companies ROICs compare? What does this suggest about the two companies?
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