Examveda
Examveda

Profit margin = 4.5%, assets turnover = 2.2 times, equity multiplier = 2.7 times then return on equity will be

A. 26.73%

B. 25.73%

C. 9.40%

D. 9.00%

Answer: Option A

Solution(By Examveda Team)

Return on Equity (ROE) = Net Profit Margin x Asset Turnover Ratio x Equity Multiplier.
= 4.5% x 2.2 x 2.7
= 26.73%

This Question Belongs to Commerce >> Financial Management

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Comments ( 1 )

  1. Ravi Teja
    Ravi Teja :
    6 years ago

    Explain please

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