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Zielflug [23.3K]
3 years ago
10

A firm has a tax burden of 0.9,a leverage ratio of 1.1, an interest burden of 0.6, and a return-on-sales ratio of 13%. The firm

generates $2.62 in sales per dollar of assets.
What is the firm's ROE?
Business
1 answer:
Afina-wow [57]3 years ago
4 0

Answer:

the firm's ROE is 20%

Explanation:

The tax burden is 0.9

The interest burden is 0.6

The return on sales margin is 13%

The turnover ratio is 2.62

The leverage ratio is 1.1

Calculate the ROE

ROE = 0.9 * 0.6 * 0.13 * 2.62 * 1.1

=0.2 or 20%

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