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Flura [38]
4 years ago
15

Assume the following data for Cable Corporation and Multi-Media Inc. Cable Corporation Multi-Media Inc. Net income $ 30,700 $ 11

5,000 Sales 336,000 2,370,000 Total assets 485,000 919,000 Total debt 229,000 465,000 Stockholders' equity 256,000 454,000 a-1. Compute return on stockholders’ equity for both firms. (Input your answers as a percent rounded to 2 decimal places.)
Business
1 answer:
BlackZzzverrR [31]4 years ago
6 0

Answer:

<u>Return on equity (ROE) for Firm A</u>   = 11.99%

<u>Return on equity (ROE) for Firm B</u>   = 25.33%

Explanation:

Return on equity (ROE) = net income by shareholders' equity

<u>Return on equity (ROE) for Firm A </u>

30,700/256,000 x 100= 11.99%

<u>Return on equity (ROE) for Firm A </u>

115,000/454,000x 100 = 25.33%

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