Question
This year Baldwin achieved an ROE of 19.5%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the
This year Baldwin achieved an ROE of 19.5%. Suppose next year the profit margin (Net Income/Sales) increases. Assuming sales, assets and financial leverage remain the same next year, what effect would you expect this action to have on Baldwin's ROE?
a. Baldwin ROE will remain the same.
b. Baldwin ROE will increase.
c. Baldwin ROE will decrease.
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Choose Wisely
Authors: Eliot Dylan Marr
1st Edition
1498416365, 978-1498416368
