We want to compute the ROE of Chary. It has $20 m of book value of equity, and $80m of debt. Chary expects to sell $20m

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answerhappygod
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We want to compute the ROE of Chary. It has $20 m of book value of equity, and $80m of debt. Chary expects to sell $20m

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We want to compute the ROE of Chary. It has $20 m of book value
of equity, and $80m of debt. Chary expects to sell $20m worth of
sales and have EAT of $5m and keep 40% of its profit. Furthermore,
it has $100m of assets. Its coe is .12 and its beta is 1.2.
Calculate Chary’s ROE. Evaluate ROE as a performance measure.
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