A firm has a debt-to-asset ratio of 70%, $210,000 in debt, and a net income of $42,000. Calculate the return on equity (ROE). a. 60.9% b. 46.7% c. 63.4% d. 56.1%

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 7EA: Assume Skyler Industries has debt of $4,500,000 with a cost of capital of 7.5% and equity of...
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A firm has a debt-to-asset ratio of 70%, $210,000 in
debt, and a net income of $42,000. Calculate the
return on equity (ROE).
a. 60.9%
b. 46.7%
c. 63.4%
d. 56.1%
Transcribed Image Text:A firm has a debt-to-asset ratio of 70%, $210,000 in debt, and a net income of $42,000. Calculate the return on equity (ROE). a. 60.9% b. 46.7% c. 63.4% d. 56.1%
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