Given the solution and accounting question Mountain View Restaurant has a net profit of $126,000 and sales of $1,800,000.It has total assets of $6,300,000. Its book value/equity is $2,100,000 and it paysout 25% of earnings as dividends. What is the return on equity using the DuPontIdentity formula?

Step 1: Definition of Return on Equity (ROE)Return on Equity (ROE) is a measure of a company's…

Answered: Mountain View Restaurant has a net…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 2P

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Mountain View Restaurant has a net profit of $126,000 and sales of $1,800,000. It has total assets of $6,300,000. Its book value/equity is $2,100,000 and it pays out 25% of earnings as dividends. What is the return on equity using the DuPont Identity formula?