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Triss [41]
3 years ago
8

Hernandez Corporation expects to have the following data during the coming year. What is Hernandez's expected ROE? Assets $200,0

00 Interest rate 8% D/A 65% Tax rate 40% EBIT $25,000
Business
1 answer:
KatRina [158]3 years ago
4 0

Answer:

12.51%

Explanation:

return on equity (ROE) = net income / shareholders' equity

since assets = $200,000

liabilities + equity = $200,000

liabilities = $200,000 x 65% = $130,000

equity = $200,000 - $130,000 = $70,000

net income = (EBIT - interests) x (1 - taxes)

  • EBIT = $25,000
  • interests = $130,000 x 8% = $10,400
  • 1 - taxes = 1 - 40% = 0.6

net income = ($25,000 - $10,400) x 0.6 = $8,760

ROE = $8,760 / $70,000 = 12.51%

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Answer:

Option (A) is correct.

Explanation:

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For example:

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3 years ago
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<h3>What are the other steps in the MBO process?</h3>

After assigning the objectives to the employees (usually through a line manager), the next steps are to:

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Please see the link below for more about Management by Objective:

brainly.com/question/5731723

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