A company has a debt-to-asset ratio of 80%, total debt of $400,000, and net income of $75,000. Calculate the return on equity. a) 65% b) 75% c) 80% d) 85%

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter13: Capital Structure Concepts
Section: Chapter Questions
Problem 6P
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A company has a debt-to-asset ratio of 80%, total debt of
$400,000, and net income of $75,000. Calculate the return on
equity.
a) 65%
b) 75%
c) 80%
d) 85%
Transcribed Image Text:A company has a debt-to-asset ratio of 80%, total debt of $400,000, and net income of $75,000. Calculate the return on equity. a) 65% b) 75% c) 80% d) 85%
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