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SSR Inc. has an equity multiplier of 1.5, a total assets turnover ratio of 0.4, and a profit margin of 15 percent. The Board of
SSR Inc. has an equity multiplier of 1.5, a total assets turnover ratio of 0.4, and a profit margin of 15 percent. The Board of Directors is unhappy with the current return on equity (ROE), and they think it could be doubled. This could be accomplished (1) by increasing the profit margin to 20 percent and (2) by increasing debt utilization. Total assets turnover will not change. What new debt/equity ratio, along with the new 20 percent profit margin, would be required to double the ROE
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