24. A firm has a net profit margin of 13 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and the after-tax interest cost on total debt of 3 percent. what is the firm's ROE? a. 8.4% b. 10.9% c. 12.0% d. 133% e. 20% 25. A firm has a total debt -to -assets ratio of 0.60. Its equity multiplier is a. 0.70 b. 3.33 c. 0.77 d. 2.50 c. None of the above 26. The Textbook Production Company has been hit hard due to increased competition. The company's analysts predict that earnings (and dividends) will decline at a rate of 5 percent annually forever. Assume that ks = 11 percent and D0= $2.00. What will be the price of the company's stock three years from now? a. $27.17 b. $ 6.23 c. $28.50 d. $10.18 e. $20.63 27. You buy a December put option on ABC at an exercise price of $40. You pay a $2 premium to guy this option. The market price of ABC is $18 when you exercise the option. Your profit or loss is a. $20 b. $22 c. $18 d. $16 e. $26 24. A firm has a net profit margin of 13 percent on sales of $20,000,000. If the firm has debt of $7,500,000, total assets of $22,500,000, and the after-tax interest cost on total debt of 3 percent. what is the firm's ROE? a. 8.4% b. 10.9% c. 12.0% d. 133% e. 20% 25. A firm has a total debt -to -assets ratio of 0.60. Its equity multiplier is a. 0.70 b. 3.33 c. 0.77 d. 2.50 c. None of the above 26. The Textbook Production Company has been hit hard due to increased competition. The company's analysts predict that earnings (and dividends) will decline at a rate of 5 percent annually forever. Assume that ks = 11 percent and D0= $2.00. What will be the price of the company's stock three years from now? a. $27.17 b. $ 6.23 c. $28.50 d. $10.18 e. $20.63 27. You buy a December put option on ABC at an exercise price of $40. You pay a $2 premium to guy this option. The market price of ABC is $18 when you exercise the option. Your profit or loss is a. $20 b. $22 c. $18 d. $16 e. $26