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A company borrows $0.80 for every $1 of equity. They earn $0.30 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 12.5 percent b. 16.67 percent c. 20.0 percent d. 25.0 percent e. 30.0 percent

A company borrows $0.80 for every $1 of equity. They earn $0.30 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 12.5 percent b. 16.67 percent c. 20.0 percent d. 25.0 percent e. 30.0 percent

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter7: Analysis Of Financial Statements
Section: Chapter Questions
Problem 6P
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A company borrows $0.80 for every $1 of equity. They earn $0.30 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 12.5 percent b. 16.67 percent c. 20.0 percent d. 25.0 percent e. 30.0 percent
Transcribed Image Text:A company borrows $0.80 for every $1 of equity. They earn $0.30 in profit for every $1 of equity in the firm. What is the firm's return on assets (ROA)? a. 12.5 percent b. 16.67 percent c. 20.0 percent d. 25.0 percent e. 30.0 percent
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