A company has $200 billion of sales and $10 billion of net income. Its total assets are
Question:
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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Step by Step Answer:
To calculate the profit margin use the formula Profit Margin Net Income Sales Given Sales 200 billio...View the full answer
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Related Book For 
Intermediate Financial Management
ISBN: 9781337395083
13th Edition
Authors: Eugene F. Brigham, Phillip R. Daves
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