Stephanie thinks shell need $60,000 to start her business and expects it to make $40,000 the first
Question:
Stephanie thinks she’ll need $60,000 to start her business and expects it to make $40,000 the first year.
a. If she financed that $60,000 totally from her own contributions, what would be her return on equity?
b. What if she used $20,000 and got the remaining $40,000 from Brenda? Then what would Stephanie’s return on equity be?
c. What if Stephanie could fund half the amount herself and borrowed the rest? What would her return on equity be then?
Step by Step Answer:
a 67 40000...View the full answer
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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