Your sister is thinking about starting a new business. The company would require $425,000 of assets, and it would be

Your sister is thinking about starting a new business. The company would require $425,000 of assets, and it would be financed entirely with common stock. She will go forward only if she thinks the firm can provide a 13.5% return on the invested capital, which means that the firm must have an ROE of 13.5%. How much net income must be expected to warrant starting the business?


Leave a Reply

Your email address will not be published. Required fields are marked *