Greg is interested in investing in a small company, and he thinks Allen, Co. might be a good investment. He has been given the following information and would like to know the return on stockholder's equity (ROE). Assume Allen's marginal tax rate is 40%. $\begin{array}{lr}
\text {Earnings before taxes(EBT): }&\text {\$ 3 million }\
\text { Retum onSales(ROS):}&\text {3.6 \% }\
\text {Total liabilities: }&\text {\$ 15.0 million }\
\text {Total stockholded's equity: }&\text {\$10.0 million }\
\end{array}$

Question

Quizplus · Accepted Answer

The Answer of Greg is interested in investing in a small company, and he thinks Allen, Co. might be a good investment. He has been given the following information and would like to know the return on stockholder's equity (ROE). Assume Allen's marginal tax rate is 40%. $\begin{array}{lr}
\text {Earnings before taxes(EBT): }&\text {\$ 3 million }\
\text { Retum onSales(ROS):}&\text {3.6 \% }\
\text {Total liabilities: }&\text {\$ 15.0 million }\
\text {Total stockholded's equity: }&\text {\$10.0 million }\
\end{array}$

Greg Is Interested in Investing in a Small Company, and He