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Sue is interested in investing in a small company, and he thinks Allen, Co. might be a good investment. She has been given the following
Sue is interested in investing in a small company, and he thinks Allen, Co. might be a good investment. She has been given the following information and would like to know the return on stockholders equity. Assume Allens marginal tax rate is 40%.
Earnings before taxes = $3 million
Net profit margin = 3.6%
Total liabilities = $1.5 million
Total stockholders equity = $10 million
*Hint: Try using the DuPont formula finding ROE
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