Profit margin and ROE

8.Hampton Housewares Company (HHC) has $1,250,000 of assets, and it uses only common equity capital (zero debt).Its sales for the last year were $1,000,000, and its net income was $75,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 12%.What profit margin would HHC need in order to achieve the 12% ROE?Assume that the new actions will have no effect on total assets and sales, and it will not change the companys determination to use 100% equity to finance its operations.

a. 9.00%

b.10.50%

c.12.25%

d.13.66%

e.15.00%