A firm with sales of $1 million, a net after-tax income of $30 000, total assets of $1. Million, total liabilities of $750 000 and no preferred equity has a return on equity of: A) 20 % B) 15 % Shareholders' equity: 1 500 000 - 750 000 = 750 000 C) 4 % ROE: 30 000 / 1 500 000 = 0.04 or 3 % E) None of the choices listed above.
A firm with sales of $1 million, a net after-tax income of $30 000, total assets of $1. Million, total liabilities of $750 000 and no preferred equity has a return on equity of: A) 20 % B) 1…