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Profit margin = 4 5 assets turnover = 2 2 times...

This question belongs to Commerce Financial Management
Financial Management
?

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

Answer & Solution
Correct Answer: Option A
Return on Equity (ROE) = Net Profit Margin x Asset Turnover Ratio x Equity Multiplier.
= 4.5% x 2.2 x 2.7
= 26.73%
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1 Comment
Ravi Teja
Ravi Teja 8 years ago
Explain please
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