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5. You have the following information on ABC Inc. and XYZ CO. Profit Asset Margin Turnover ABC 4% 2 XYZ 0.8 Equity Multiplier 1.5 3

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5. You have the following information on ABC Inc. and XYZ CO. Profit Asset Margin Turnover ABC 4% 2 XYZ 0.8 Equity Multiplier 1.5 3 6% a) Calculate both companies' return on equity b) Calculate the Profit Margin would ABC need to earn to have a return on equity equal to XYZ's

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