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Title: If ECE's return on assets (ROA) is 12%, then ECE's return on equity (ROE) is: Post by: Memphic on Nov 19, 2017 If ECE's return on assets (ROA) is 12%, then ECE's return on equity (ROE) is:
A) 10% B) 12% C) 18% D) 22% Title: Re: If ECE's return on assets (ROA) is 12%, then ECE's return on equity (ROE) is: Post by: anicid on Nov 19, 2017 D
Explanation: D) ROA = (Net Income + Interest Expense)/Assets = ($X million + 2 million)/$200 million = 0.12; X = $22 million; ROE = (Net Income)/(Shareholder Equity) = $22 million/$100 million = 0.22 = 24% |