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A company has $20 billion of sales and $1 billion of net income. Its total assets are $10 billion. The companys total assets equal total
- A company has $20 billion of sales and $1 billion of net income. Its total assets are $10 billion. The companys total assets equal total invested capital, and its capital consists of half debt and half common equity. The firms interest rate is 5%, and its tax rate is 25%.
- What is its profit margin?
- What is its ROA?
- What is its ROE?
- What is its ROIC?
- Would this firms ROA increase if it used less leverage? (The size of the firm does not change.)
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Fundamentals Of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
16th Edition
0357517571, 978-0357517574
