Question
In year 20X4, a company had a net profit margin of 18%, a total asset turnover of 1.75, and a financial leverage multiplier of 1.5.
In year 20X4, a company had a net profit margin of 18%, a total asset turnover of 1.75, and a financial leverage multiplier of 1.5. If the company's net profit margin declines to 10% in 20X5, what total asset turnover would be required to maintain the same return on equity as in 20X4, assuming no change in the financial leverage multiplier?
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Fundamentals Of Corporate Finance
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
5th Edition
0135811600, 978-0135811603
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