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Burger Corp has $500,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $600,000, and its
Burger Corp has $500,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $600,000, and its net income after taxes was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 9.6%. What profit margin would Burger need in order to achieve the 9.6%ROE, holding everything else constant? 9.5% 14% 12.5% 8% 11%
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