If Roten Rooters, Inc., has an equity multiplier of 1.56, total asset turnover o

Question

If Roten Rooters, Inc., has an equity multiplier of 1.56, total asset turnover of 1.70, and a profit margin of 6.6 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) ROE %

If Roten Rooters, Inc., has an equity multiplier of 1.56, total asset turnover of 1.70, and a profit margin of 6.6 percent, what is its ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) ROE

Explanation / Answer

ROE=Profit margin*Total assets turnover*Equity multiplier

=(0.066*1.56*1.7)

=17.50%(Approx)

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