alleryStart learning →Tax burden 0.8, interest burden 0.9, ROS 10%, asset turnover 2, equity multiplier 1.5. ROE is?
A21.6%
B18.0%
C14.4%
D28.8%
Answer & Solution
Correct answer: A. 21.6%
ROE = 0.8 x 0.9 x 10% x 2 x 1.5 = 21.6%.
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