lalalaaldgydyhg4166 lalalaaldgydyhg4166
  • 01-09-2017
  • Business
contestada

A firm has return on assets (roa) of 15 percent, and debt-equity ratio of 60 percent. calculate the firm's return on equity (roe).

Respuesta :

nobillionaireNobley
nobillionaireNobley nobillionaireNobley
  • 14-09-2017
Given that a firm has return on assets (roa) of 15 percent, and debt-equity ratio of 60 percent.

Then, equity multiplier = 1 + Debt-equity ratio = 1 + 60/100 = 1 + 0.6 = 1.6

Return on equity (roe) is given by return on asset multiplied by the equity multiplier.

Therefore, the firm's return on equity is 1.6 x 0.15 = 0.24 = 24%.
Answer Link

Otras preguntas

Which statement describes a reason the United States entered World War I on the Allied side? A.Germany's invasion of Canada posed a direct threat to the United
Is two thirds the same as four sixths
Harry needs £400 to buy a new computer. He has saved £160 so far. What percentage has Harry saved
What observation led researchers to propose that chloroplasts evolved from cyanobacteria?
If x= 0, 1, 2, and 3 and y=1, 1.5, 2, and 2.5, then what is the "y=" function?
you run 100m in 25s. If you later run the same distance in less time, explain if your speed increases or decreases
write the symbols for the following isotopes: Its atoms contain 50 electrons and 70 neutrons
Real world Examples of inertia
Which is Sam Adams known for? A. writing pamphlets about independence B. founding the radical Sons of Liberty C. leading troops at Bunker Hill D. working to mak
the strongest evidence for evolution from a common ancestor is