Problem 5 (7p) Three companies have the following results during the recent period: M Net profit margin Total assets turnover Total assets/equity 0.04 2.20 2.40 0.06 2.00 2.20 0.10 1.40 1.50 JSOBEY SCHOOL OF BUSINESS (a). Derive for each its return on equity based on the three DuPont components. (b). Given the following earnings and dividends, compute the estimated sustainable growth rate for each firm. K L M Earnings/share 2.75 3.00 4.50 Dividends/share 1.25 1.00 1.00