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Company U has reported a return on assets (ROA) of 15%. Its net income for the year was $300,000, and its total assets were $2,000,000.

  • Company U has reported a return on assets (ROA) of 15%. Its net income for the year was $300,000, and its total assets were $2,000,000. Calculate the company's return on equity (ROE) given that its equity equals its total assets minus total liabilities. Discuss the significance of ROE as a measure of profitability and efficiency in utilizing shareholders' equity to generate returns.
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