Hi Profesoor
I am struggling to solve this question can you help me to understand this better
to solve such type of questions .
ABC company’s net income is $25,000, its interest expense is $5,000, and its tax rate is 40%. Its notes payable equals $25,000, long-term debt equals $75,000, and common equity equals $250,000. The company finances only with debt and common equity, so it has no preferred stock. What are the company’s ROE and ROIC? Briefly comment on the usefulness of these two ratios for measuring the company’s financial performance.
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