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If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.

If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.

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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If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.
Transcribed Image Text:If a firm's net profit margin is 5%, its total asset turnover is 1.5 times, and its debt ratio is 20%, its return on equity is: a. 7.14%. b. 9.38%. c. 10.71%. d. 12.50%. e. 15.00%.
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