The tax burden of the firm is 0.4, the interest burden is 0.65, the return on sales is 0.05, the asset turnover is 0.90, and the leverage ratio is 1.35. What is the ROE of the firm?
A) 1.58%
B) 5.68%
C) 12.2%
D) 13.33%

Name: The tax burden of the firm is 0.4, the interest burden is 0.65, the return on sales is 0.05, the asset turnover is 0.90, and the leverage ratio is 1.35. What is the ROE of the firm? A) 1.58% B) 5.68% C) 12.2% D) 13.33%
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Question

Quizplus · Accepted Answer

ROE = 0.4 × 0.65 × 0.05 × 0.90 × 1.35 = 0.0158

The Tax Burden of the Firm Is 0