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    Question

    A company has the following details: • Net

    Profit: ₹12 lakh • Equity: ₹60 lakh • Debt: ₹40 lakh • Interest: ₹4 lakh • EBIT: ₹16 lakh Which of the following is correct?
    A ROE = 20%; ROCE = 16% Correct Answer Incorrect Answer
    B ROE = 15%; ROCE = 12% Correct Answer Incorrect Answer
    C ROE = 20%; ROCE = 13.3% Correct Answer Incorrect Answer
    D ROE = 16%; ROCE = 10% Correct Answer Incorrect Answer

    Solution

    ROE = 12/60 = 20% ROCE = EBIT / (Debt + Equity) = 16/100 = 16%

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