New Doors Corp. has $375,000 of total assets, and it uses $187,500 of total shareholder's equity capital. Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity (ROE) up to 15.0%. What profit margin (PM) would the firm need in order to achieve the 15% ROE, holding everything else constant? 1. 10.71% 2. 5.41% 3. 9.41% 4. 12.66% 5. 8.11%
New Doors Corp. has $375,000 of total assets, and it uses $187,500 of total shareholder's equity capital. Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity (ROE) up to 15.0%. What profit margin (PM) would the firm need in order to achieve the 15% ROE, holding everything else constant? 1. 10.71% 2. 5.41% 3. 9.41% 4. 12.66% 5. 8.11%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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New Doors Corp. has $375,000 of total assets, and it uses $187,500 of total shareholder's equity capital. Its sales for the last year were $520,000, and its net income was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the
1. |
10.71% |
|
2. |
5.41% |
|
3. |
9.41% |
|
4. |
12.66% |
|
5. |
8.11% |
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