Last year, In Debt Company paid $78 million of interest expense, and its average rate of interest for the year was 10.0%.
The company’s ROE is 16.1%, and it pays no dividends. Estimate next year’s interest expense assuming that interest rates will fall by 28%
and the company keeps a constant equity multiplier of 20%.
1. Nextyear’s estimated interest expense is $_____________?
Question 1:US Equities Return (in US $ terms for 2014):Equities Return= Net Income/ Shareholder’s EquityTotal US Equity for 2014= $86950Average 86950/5= $1739030% in US Equities/100 * 86950…
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