A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million ,and its total assets of $60 million. What is the ROE?
A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million ,and its total assets of $60 million. What is the ROE?
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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A firm has a profit margin of 3% and an equity multiplier of 1.9. Its sales are $150 million ,and its total assets of $60 million. What is the ROE?
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My book gives the formula "Total assets turnover ratio = Sales divided by total assets" But here, the answer uses the opposite. Why?
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