A firm has a tax burden ratio of 0.8, a leverage ratio of 1.35, an interest burden of 0.8, and a return on sales of 12%. The firm generates $2.60 in sales per dollar of assets. …

Question

asked Sep 14, 2021 150k views

1 Answer

Herbert Lynch · Answer 1 · 2021-09-19T09:44:59+0000

Answer:

28.64%

Step-by-step explanation:

ROE = Tax burden * Interest burden * Margin * Turnover * Leverage

ROE = 0.85*0.8*0.12*2.60*1.35

ROE = 0.286416

ROE = 28.64%