Three companies have the following results during the recent period. a. Derive for each its return on
Question:
a. Derive for each its return on equity based on the three DuPont components.
b. Given the following earnings and dividends, compute the estimated sustainable growth rate for eachfirm.
Transcribed Image Text:
Earnings/share Dividends/share 2.75 1.25 3.00 1.00 1 4.50 1.00
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 57% (14 reviews)
a ROE Net profit margin x Total asset turnover x Total assetsequity Company K ROE 00...View the full answer
Answered By
Simon kingori
I am a tier-one market researcher and content developer who has been in this field for the last six years. I’ve run the freelancing gamut; from market research, data mining and SEO/SMM to copywriting, Content Development, you name it, I’ve done it. I’m extremely motivated, organized and disciplined – you have to be to work from home. My experience in Freelancing is invaluable- but what makes me a cut above the rest is my passion to deliver quality results to all my clients- it’s important to note, I've never had a dissatisfied client. Backed by a Masters degree in Computer Science from MOI university, I have the required skill set and burning passion and desire to deliver the best results for my clients. This is the reason why I am a cut above the rest. Having taken a Bsc. in computer science and statistics, I deal with all round fields in the IT category. It is a field i enjoy working in as it is dynamic and new things present themselves every day for research and exploration.
5.00+
1+ Reviews
10+ Question Solved
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
Question Posted:
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
Students also viewed these Accounting questions
-
Three companies have the following financial results: What can you conclude about the financial results and the operating strategy of eachcompany? Company A Company B Profit margin Asset turnover...
-
Two companies have the following balance sheets as of December 31, 20X8: In 20X9, each company had sales of $700,000 and operating expenses of $600,000. Sunriver had not repaid the $125,000 Note...
-
Point Claire Company had the following results during the most recent year: sales $500,000; residual income $5,000; investment turnover 2.5; and a required rate of return of 15%. Instructions (a)...
-
Transfer pricing is a significant area of concern for taxing authorities and multinational entities (MNE). Examine at least two (2) potential transfer pricing issues that create concern for both...
-
Referring to Exercise 8.46. determine the sample size needed in order to be 99 percent confident that , the sample proportion of ColorSmart-5000 television sets that last at least five years without...
-
One industry expert stated that software today has six errors for every 1,000 lines of code. a. Assuming that there is only one opportunity to make an error for each line of code, at what sigma level...
-
Galway Kinnell plans to apply an attributes estimation sampling plan to the shipping controls used by the Raffel & Olds Corporation, a December 31, 1999 year end printing company in New York. Based...
-
A firm with a 13% cost of capital must select the optimal group of projects from those shown in the following table, given its capital budget of $1 million. a. Calculate the present value of cash...
-
Give a simple description of the language generated by the following context-free grammar: S aSb|bSa|SS| and prove that it does in fact generate that language. Once you know the language, the...
-
Howard Jaffe is the founder and manager of Old Town Playhouse. The business needs to obtain a bank loan to finance the production of its next play. As part of the loan application, Jaffe was asked to...
-
The Shamrock Vegetable Company has the following results. Net sales ............ $6,000,000 Net total assets ..........4,000,000 Depreciation ........... 160,000 Net income ............ 400,000...
-
Given the following balance sheet, fill in the ratio values for 2013 and discuss how these results compare with both the industry average and prior average performance of Sophie Enterprises. SOPHIE...
-
In the reaction of ferrocene with MeC(O)Cl and AlCl 3 , how could one distinguish between the products Fe( 5 -C 5 H 4 C(O)Me) 2 and ( 5 -Cp)Fe( 5 -C 5 H 4 C(O)Me) by methods other than elemental...
-
The company has been plagued by disorganized projects that are not in alignment with business goals, and not focused on interactivity between the projects where applicable. They want to have a better...
-
Project A is four months long, has four stakeholders, and has completed planning. Project B is 12 months long, has 10 stakeholders, and is in execution. Project C is 12 months long, has four...
-
You are the project manager on a defense project and are creating a network diagram. Activity A (7 days) and Activity B (12 days) can start immediately. Activity C (3 days) can start after Activity A...
-
Activity A is worth \($800,\) is 100% complete, and actually cost \($800.\) Activity B is worth \($300,\) is 90% complete, and actually cost \($480\) so far. Activity C is worth \($800,\) is 75%...
-
The Timoshenko beam model is more accurate than the Euler-Bernoulli beam model because it includes the effects of ___________________ and _______________________.
-
In 2015, the EPA set the primary standard for ozone at 0.070 ppm. If a sample of air contains 8 ozone molecules for every 10 8 molecules of air, does it meet this standard? Explain your answer.
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
FiscalNote is a startup founded by a Washington, DC entrepreneur and funded by a Singapore sovereign wealth fund, the Winklevoss twins of Facebook fame, and others. It uses machine learning...
-
How are the accounts of investor and investee companies affected when the investor acquires stock from stockholders of the investee (for example, a New York Stock Exchange purchase)? Does this differ...
-
Should goodwill arising from an equity investment of more than 20 percent be recorded separately on the books of the investor? Explain.
-
Should goodwill arising from an equity investment of more than 20 percent be recorded separately on the books of the investor? Explain.
-
What are the advantages of deploying multicast routing protocols like PIM and IGMP in multimedia streaming applications, and how do they optimize bandwidth utilization and reduce network congestion ?
-
2. (10 points) Describe in a few words what the algorithm Foo does and what the algorithm Bar does. Analyze the worst-case running time of each algorithm and express it using "Big-Oh" notation....
-
Let x(t) = u(t+2)-u(t-1) where u(t) = < [1, t>0 0,t <0 (unit step signal) and h(t)=e'u(-t+1). a) Sketch x(t) and h(t). Label all your axes. b) Calculate the convolution y(t) = x(t)* h(t). Simplify...
Study smarter with the SolutionInn App