A company has $200 billion of sales and $10 billion of net income. Its total assets are

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A company has $200 billion of sales and $10 billion of net income.

Its total assets are $100 billion, financed half by debt and half by common equity. What is its profit margin? (5%) What is its ROA?

(10%) What is its ROE? (20%) Would ROA increase if the firm used less leverage? (Yes) Would ROE increase?

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Intermediate Financial Management

ISBN: 9781337395083

13th Edition

Authors: Eugene F. Brigham, Phillip R. Daves

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