You are preparing an equity research report focusing on Mattel (a major toy manufacturer). You identify the following from Mattels most recent financial statements.

Return on Equity (ROE) .12

Dividends $288

Accounts Payable $900

Average Days Payable 33

Total Liabilities $5,000

Retention Ratio 0.60

Profit Margin .05

Tax Rate .24

a. Conduct a three-stage ROE Decomposition (DuPont Analysis) for Mattel

b. As you are explaining how to conduct the ROE Decomposition, your assistant asks, Because increasing the equity multiplier will increase the return on equity (ROE), Mattel should attempt to maximize its equity multiplier. Explain whether you would agree or disagree.