Business, 06.04.2021 01:00 bncook

Given the following information, answer the following questions. Two firms with the same operating leverage, business risk, and EBIT ($4,000). They only differ with respect to their use of debt (capital structure). Firm A Firm B No debt $10,000 of 12% debt $20,000 in assets $20,000 in assets 40% tax rate 40% tax rate A given change in EBIT will result in a larger change in ROE for Firm ___. A. A B. B C. More information is needed to answer this question

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