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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Firm A and Firm B plan to raise $1 million to finance identical projects. Firm A finances the project with 100 percent equity, whereas firm B uses a 50-50 mix of debt and equity. The interest rate on the debt equals 7 percent. At what rate of return on the investment (i.e., assets) will the rate of return on equity be the same for Firms A and B? (Hint: Think through Table 10.2.)

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