Examveda
Examveda

Return on assets = 6.7% and equity multiplier = 2.5% then return on equity will be

A. 16.75%

B. 2.68%

C. 0.37%

D. 9.20%

Answer: Option A

Solution(By Examveda Team)

Return on equity = Return on assets × Equity multiplier
= 6.7% × 2.5% = 16.75%

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