Okay, so let's calculate the return on equity for a bank. First thing we're gonna do is turn to the income statement and go and grab the net income. Then we're gonna turn to the balance sheet and go and grab the equity, shareholders' equity from the bottom of the balance sheet. Simply take the net income divided by the shareholders' equity, and we've got return on equity. Quite reasonably, a bank would say, "Okay, well, what might threaten my return on equity? What might happen to reduce it? And what can I do to try and improve it?" And that's what we're gonna look at over the next couple of workouts. So if we move down to the workout below, we're asked, bank A is required to increase its equity financing from 10% to 20%. So the equity we just picked up from the balance sheet is gonna change from 10 to 20. Describe how this impacts the return on equity. Well, it's not gonna be that flattering. However, if we think about net income, if we swap out some of our deposits for equity, then we're gonna reduce our interest expense. So in order to revise this, let's go and grab the net income from above of 0.8 and then we're gonna add to it the interest rate on deposits of 0.2 multiplied by 10. So 10 being the increase in equity. Therefore, the reduction in deposits multiplied by, open bracket, one minus the appropriate tax rate. So this gives us our revised net income. Now admittedly, if I hit enter, our revision isn't that groundbreaking because it's a very, very small change. So it's not something we can perceive at one decimal place. Okay, let's think about the revised equity financing. Well, we know from above that the deposits, the loan assets were 100. If we multiply that out by the revised equity financing of 20%, then we've got 20. And so if I calculate my return on equity, 0.8 over 20, that's pretty poor. Okay, so it's gone from 8% down to 4.1%. And so let's try and address that in the next workout. And we are told that bank A estimates it could generate some advisory fees of 0.5 per annum if it offered some M&A advisory services. There are some costs associated with that, and they come in at 0.2. So let's think about how this has an impact on return on equity. And here we're just gonna ignore the tax effect. So if we say equals, I'm gonna go and grab the revised net income from the previous workout, and I'm gonna add onto that our advisory fees. But, of course, I'm gonna subtract from that the costs associated with those advisory fees. So that gives us our revised net income of 1.1. Let's think about equity. So our equity above had increased to 20 and we're trying to improve upon that. So now if we recalculate our return on equity as net income over our revised equity, then we've got 5.6. So what a bank can do is try and find ways to enhance its return on equity. And at the same, try and minimize the shareholders' equity as a source of financing.