ROE = 15.40 is the right answer.
ROE = (profit margin x asset turnover x equity multiplier)
ROE = (7 x 1.63 x 1.35)
ROE = 15.40
<h3>What is Return on Equity?</h3>
The efficiency of a company's management team in managing the capital that shareholders have invested in it can be gauged by investors using the ratio known as return on equity (ROE). In other words, return on equity evaluates how profitable a company is in comparison to the equity held by stockholders. A company's management is more effective at generating revenue and growth from its equity financing the higher the ROE.
Using ROE, one may assess a business's position in relation to the market and its rivals.
The method is especially useful when comparing businesses in the same industry since it can be used to evaluate almost any company with a focus more on tangible than intangible assets and to identify which businesses are more financially efficient.
Shareholder equity divided by net income is referred to as the return on equity (ROE).
Before common-stock dividends are paid, the bottom line profit shown on an organization's income statement is known as net income. An alternative to net income is free cash flow (FCF), which is another measure of profitability.
Thus, ROE is a financial measuring tool for any business.
For more information on ROE, refer to the given link:
brainly.com/question/27821130
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