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A firm has a return on equity of 14.60 percent and a profitmargin of 10...

A firm has a return on equity of 14.60 percent and a profit margin of 10 percent. What is the return on assets if the equity multiplier is 1.4?

A. 10.43% B. 11.48% C. 11.55% D. 20.16%

Solutions

Expert Solution

Return on assets is calculated using the below formula:

ROA = ROE / Equity multiplier

= 14.60% / 1.4

= 10.43%.

Hence, the answer is option a.

jeff jeffy answered 2 years ago
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