Below is selected information from Tricrop.
$$\begin{array} { | l | c | c | }
\hline & \underline { \text { Year 1 } } & \underline { \text { Year 2 } } \
\hline \begin{array} { l }
\text { Net operating assets } \
\text { /common equity }
\end{array} & 1.37 & 1.53 \
\hline \begin{array} { l }
\text { Net operating profit } \
\text { margin }
\end{array} & 19 \% & 21 \% \
\hline \text { Income tax rate } & 47 \% & 28 \% \
\hline \begin{array} { l }
\text { Revenues/net operating } \
\text { assets }
\end{array} & 0.81 & 0.61 \
\hline \text { EBIT/revenues } & 38 \% & 32 \% \
\hline
\end{array}$$
-Return on Common Equity for Year 1 is:

Question

Below is selected information from Tricrop.
 $$\begin{array} { | l | c | c | } 
\hline & \underline { \text { Year 1 } } & \underline { \text { Year 2 } } \
\hline \begin{array} { l } 
\text { Net operating assets } \
\text { /common equity }
\end{array} & 1.37 & 1.53 \
\hline \begin{array} { l } 
\text { Net operating profit } \
\text { margin }
\end{array} & 19 \% & 21 \% \
\hline \text { Income tax rate } & 47 \% & 28 \% \
\hline \begin{array} { l } 
\text { Revenues/net operating } \
\text { assets }
\end{array} & 0.81 & 0.61 \
\hline \text { EBIT/revenues } & 38 \% & 32 \% \
\hline
\end{array}$$
-Return on Common Equity for Year 1 is:

Quizplus · Accepted Answer

Return on Common Equity = Net operating profit margin * Net operating assets / common equity * (1 - Income tax rate)= 19% * 1.37 * (1 - 47%)= 19% * 1.37 * 0.53= 21.08%

Below Is Selected Information from Tricrop -Return on Common Equity for Year 1 Is: A) 19

Below Is Selected Information from Tricrop -Return on Common Equity for Year 1 Is:
A) 19