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  3. ou have the following data. what is the roe differ

ou have the following data. What is the ROE difference between Firm L and Firm...

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Finance

ou have the following data. What is the ROE difference between Firm L and Firm U,

in order words, ROEL - ROEU = ?

Firm U

Capital : $30000

EBIT : $8439

Tax rate = 25%

Equity : $30000

Debt : $0

Firm L

Capital : $30000

EBIT : $8439

Tax rate = 25%

Equity : $17180

Debt : $3913

Rd (interest rate): 8%

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