Question

A firm has a profit margin of 7% and an equity multiplier of 1.9. Its sales are $230 million, and it has total assets of $92 million. What is its ROE? Do not round intermediate calculations. Round your answer to two decimal places.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Related Finance Q&A

Find answers to questions asked by students like you.

Q: The figures below show plots of monthly rates of return on three stocks versus those of the market i...

A: Since there are multiple questions, we will answer only first three as per our answering guidelines....

Q: Balance Sheet 3-Dudes, Inc. Liabilities & Owners' Equity: Assets: 2021 2022 $22,000 $18,000 $26,000 ...

A: Calculate the change in long-term debt as follows:

Q: Under/Over Valued Stock A manager believes his firm will earn a 11.20 percent return next year. His ...

A: Calculation of Required Return:The required return is 10.70%.

Q: Could I Industries just paid a dividend of $1.10 per share. The dividends are expected to grow at a ...

A: Given that;Recent dividend is $1.10Expected growth rate of dividends for next 6 years is 20%Constant...

Q: A mining company in South Africa has discovered a new gold vein in a mountain 150 kilometers north o...

A: a) Cash outflow is the Cost of the equipment + installation costCash outflow = $900000 + $165000Cash...

Q: XYZ is considering a 3-yr project. The initial outlay is -$120,000, annual cash flow is $50,000 and ...

A: Calculation of Net present value (NPV):Answer:Net present value (NPV) is $4,988.13

Q: Suppose that Papa Bell, Inc.’s equity is currently selling for $50 per share, with 3.5 million share...

A: There are 12,000 bonds outstanding and are selling at 94% of par value. Generally, the par value of ...

Q: A new high-growth business has issued stock options to new employees as part of their overall compen...

A: Gain on sale of options is the product of the number of options received and the gain on each share....

Q: Consider a project to produce solar water heaters. It requires a $10 million investment and offers a...

A: Net Present Value of the project is:

Q: Problem 13-7 Discounted Payback (LG13-2) Compute the discounted payback statistic for Project C if ...

A: Calculation of Discounted Payback Period: The discounted payback period is 2.53 years.Excel Spreadsh...

Q: How much would you need to deposit in an account now in order to have $2000 in the account in 10 yea...

A: The future value is $2,000.Interest rate is 7% compounded monthly. Interest per month will be 7% ÷ 1...

Q: 1. You are considering expanding your product line, which currently consists of Lee’s Press-on Nails...

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you. ...

Q: The future value of $500 to be received at the beginning of each year for seven years ata discount r...

A: Annuity = $500Time Period (t) = 7 YearsDiscount Rate (r) = 8% Calculation of future value is as foll...

Q: If your credit card balance is $650 and the interest rate is 12% APR, then the credit card interest ...

A: Given that the annual percentage rate is 12%To calculate the charges, we need to convert the annual ...

Q: The Drogon Co. just issued a dividend of $2.96 per share on its common stock. The company is expecte...

A: Calculation of cost of equity:Hence, the cost of equity is 12.97%.

Q: Assume that you purchase a five-year, $1,000 par value bond, with a 6 percent coupon and a yield of ...

A: Face Value of Bond = $1,000Coupon Rate = 6%Coupon Payment = $1,000 × 6% = $60New Yield = 8% or 0.08T...

Q: The present value of $500 to be received 7 years from now at an interest rate of 8percent is ?

A: Calculation of Present Value:The present value is $291.75.Excel Spreadsheet:

Q: Med-Ready Inc. has a leading P/E of 12.48 and a 5-year consensus growth rate forecast of 7.04%. The ...

A: Calculation of Firm’s PEG:The firm’s PEG is 1.77.

Q: What effect does Risk-free rate have on call option price?

A: Risk-free rate is the rate of return from an investment having no risk or zero risk. In other words,...

Q: A company is expected to maintain a constant 3 percent growth rate in its dividends indefinitely. If...

A: Information provided:Constant growth rate = 3%Dividend yield = 4.85%

Q: Hi, I can't figure out how to do question D. I know the answer to E will be the answer from B  plus ...

A: d)Calculation of Value of Stock in Year 4 and beyond:The value of stock in year 4 and beyond is $57....

Q: suppose that you would like to save $20,000 over 5 years to use as a down payment for a house by mak...

A: Computation of monthly deposit:Hence, the monthly deposit into the account is $301.66 per month.

Q: You have $500,000 saved for retirement. Your account earns 9% interest. How much will you be able to...

A: The payment type given in the question refers to annuity payouts, the annuity payment options are no...

Q: How do you solve a,b, and c?

A: a)The computation of profit is as follows:Hence, the profit is $14025.

Q: XYZ company has just paid a dividend of $1.15. The required rate of return on the stock is 13.4%, an...

A: a) Dividend just paid (D0) = $1.15Required rate of return ( r ) = 13.4%Constant growth rate of divid...

Q: An investor has $45,000 to invest. He wants to diversify his portfolio by putting dividing the money...

A: Hence, the investment made in bond in $12,000. It is assumed that investment in bonds is X, thus inv...

Q: Tefft Industires has an average inventory of $170,000, sells on term of 2/10, net 30, and its cost o...

A: Inventory conversion period is the number of days in which the inventory is stored before being sold

Q: A firm borrows $100,000 under a 3 year agreement at 12% interest. The loan requires annual payments ...

A: A baloon loan (could be mortgage, or a commercial loan etc) is a loan in which a lump sum payment is...

Q: The present value of $500 to be received at the beginning of each year for seven years ata discount ...

A: The formula to compute present value annuity due is as follows:

Q: Suppose you purchase a 30-year, zero-coupon bond with a face value of $100 and a yield to maturity o...

A: Zero coupon bonds do not make coupon payments. They are generally sold at a discount and mature at p...

Q: The present value of $500 to be received at the end of each year for seven years at adiscount rate o...

A: Annuities are a regular stream of payments made for a defined period. Resent value of these annuitie...

Q: O 1 75% AT&T LTE 11:52 AM 17 Exit Conglomerate 2. If Ford Motor Company bought The Goodyear Tire & R...

A: Horizontal merger is the merger in which two firms consolidates that belongs to the same industry.Ve...

Q: need help on all

A: a.Plowback Ratio = 1/5 = 0.2ROE = 10%Growth Rate = 0.2 × 10% = 0.02 or 2%Earnings per Share = $2.1Di...

Q: 9-15 CORPORATE VALUATION Dantzler Corporation is a fast-growing supplier of office products. Analyst...

A: a)The below expression can be used to calculate horizon value:

Q: Commercial paper is usually sold at a discount. Fan Corporation has just sold an issue of 103​-day c...

A: a)Computation of effective annual rate:The effective annual rate is 6.51%.Excel spread sheet:

Q: Suppose that a bond has an 8% coupon, a 6% YTM, and a 4% YTC and is callable in 3 years. For this bo...

A: Click to see the answer

Q: Whited Inc.'s stock currently sells for $35.25 per share. The dividend is projected to increase at a...

A: The dividend for current year is calculated below:

Q: jects A and B are mutually exclusive projects with unequal lives. The cost of capital is 12% for bot...

A: In replacement chain method, the cash flows of the project are repeated till the common useful life ...

Q: O 1 75% AT&T LTE 11:52 AM Exit 26 4. Conglomerate Inc. is trading at $80/share, and is about to anno...

A: Calculation of Maximum Exchange Ratio:The maximum exchange ratio is close to 1.43.Excel Spreadsheet:

Q: A loan commitment of $4.26 million with an up-front fee of 60 basis points and a back-end fee of 50 ...

A: Given that the total loan commitment is $4.26 million, up-front fee is 60 basis points, back-end fee...

Q: You purchase one Ruth April 25 put contract for a premium of $6.58. You hold the option until the ex...

A: Strike price of the put option = $25Underlying price = $32Option premium = $6.58

Q: Given the following information, calculate the debt ratio percentage:   Liabilities = $24,500 Liquid...

A: The debt ratio evaluates the financial leverage of an organization. Organizations with more elevated...

Q: Find the cost of each item in 5 years, assuming an inflation rate of 7% (compounded continuously). (...

A: Compute the cost of gallon of gas:The cost of gallon of gas is $4.90.Excel spread sheet:

Q: If you deposit $10,000 in a bank account that pays 10 percent interest annually, how much would be i...

A: Future value of a lumpsum deposited today can be calculated using the future value formula.Here,Prin...

Q: I need exampel on: Price - to -earning ratio Price book ratio Price to cash flow ratio

A: Price Earnings Ratio: It is the connection between an organization's price of stock and the EPS (ear...

Q: Don’s Captain Morgan, Inc. needs to raise $12.70 million to finance plant expansion. In discussions ...

A: The offer price for the share is $20.60.The receivable price per share is $16.75.The underwriter spr...

Q: Thickburger's net fixed assets = $200,000, total assets = $400,000, inventory =$50,000 and current l...

A: Calculation of Current Ratio and Quick Ratio:The current ratio is 4 and quick ratio is 3.50.Excel Sp...

Q: Ted has a nest egg of 1,000,000 in liquid assets and will be in retirement for 30 years. Using 5.5% ...

A: To keep her nest egg amount of $1,000,000 intact, Ted needs to withdraw 5.5%/12 of the liquid asset ...

Q: You have been given the following return information for a mutual fund, the market index, and the ri...

A: The computation of Sharpe ratio and Treynor ratio is as follows: