1) The DATA below, is given for Bank A; Return on Assets:1,46 % Return on Equity:...

1) The DATA below, is given for Bank A;

Return on Assets:1,46 %

Return on Equity: 13,6 %

Net Profits: $ 120 Million

Based on this DATA, calculate the following values for Bank A.

-Total Assets in $:

-Total Equity in $:

-Equity Multiplyer (LEVERAGE):

Expert Solution

	Solution

	Given,
	Return on Assets= 1.46%
	Return on Equity = 13.6%
	Net Income = $120 Million


	We Know
1	Return on Assets =	Net Income
		Total Assets

	i.e. 0.0146 =	$120 Million
		Total Assets

	i.e. Total Assets =	$ 8,219.18 Million


2	Return on Equity =	Net Income
		Equity

	i.e. 0.136 =	$120 Million
		Equity

	i.e. Equity =	$ 882.35 Million


3	Equity Multiplier =	Total Assets
		Total Equity

	=	$ 8,219.18 Million
		$ 882.35 Million

	=	9.32

jeff jeffy answered 1 year ago

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