Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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- 9. The Merriam Company has determined that its return on equity is 15 percent. Management is interested in the various components that went into this calculation. You are given the following information: total 0.35 and total assets turnover = 2.8. What is the profit margin? debt/total assets = a. b. C. d. e. 3.48% 5.42% 6.96% 2.45% 12.82% 'c qurrent assets?arrow_forwardUsing the DuPont method, evaluate the effects of the following relationships for the Butters Corporation. a. Butters Corporation has a profit margin of 5.5 percent and its return on assets (investment) is 15.5 percent. What is its assets turnover? Note: Round your answer to 2 decimal places. Assets turnover ratio b. If the Butters Corporation has a debt-to-total-assets ratio of 25.00 percent, what would the firm's return on equity be? Note: Input your answer as a percent rounded to 2 decimal places. Return on equity % Return on equity times c. What would happen to return on equity if the debt-to-total-assets ratio decreased to 20.00 percent? Note: Input your answer as a percent rounded to 2 decimal places. $arrow_forwardIf Roten Rooters, Inc., has an equity multiplier of 1.58, total asset turnover of 1.80, and a profit margin of 6.8 percent, what is its ROE?arrow_forward
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- ROE Needham Pharmaceuticals has a profit margin of 3.5% and an equity multiplier of 1.5. Its sales are $100 million and it has total assets of $60 million. What is its Return on Equity (ROE)? Round your answer to two decimal places.arrow_forwardRed Fire has an equity multiplier of 1.6, a return on assets of 10.35 percent, and an asset turnover of .9. What is its ROE?arrow_forwardJack Corp. has a profit margin of 4.0 percent, total asset turnover of 2.1, and ROE of 16.42 percent. What is this firm’s debt-equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forward
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