Bank A has the following balance sheet: Assets Liabilities Reserves $50 million Deposits $ 200 million Securities 850 million Bank capital $50 million Loans $150 million Bank B has the following balance sheet: Assets Liabilities Reserves $50 million Deposits $225 million Securities 850 million Bank capital $25 million Loans $150 million 1. Both banks earn $5 million as an annual after-tax profit. Calculate ROA (return on asset) and ROE (return on equity) for both banks.
Bank A has the following balance sheet: Assets Liabilities Reserves $50 million Deposits $ 200 million Securities 850 million Bank capital $50 million Loans $150 million Bank B has the following balance sheet: Assets Liabilities Reserves $50 million Deposits $225 million Securities 850 million Bank capital $25 million Loans $150 million 1. Both banks earn $5 million as an annual after-tax profit. Calculate ROA (return on asset) and ROE (return on equity) for both banks.
Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter2: Financial Statements, Cash Flow,and Taxes
Section: Chapter Questions
Problem 9P:
Carter Swimming Pools has $16 million in net operating profit after taxes (NOPAT) in the current...
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