Author Question: The DuPont formula allows a firm to break down its return into the net profit margin, which measures ... (Read 97 times)

B · **on:** Jul 11, 2018

The DuPont formula allows a firm to break down its return into the net profit margin, which measures the firm's profitability on sales, and its total asset turnover, which indicates how efficiently the firm has used its assets to generate sales.

Indicate whether the statement is true or false

Question 2

A firm has a beta of 1.2. The market return equals 14 percent and the risk-free rate of return equals 6 percent. The estimated cost of common stock equity is ________.

A) 6 percent
B) 7.2 percent
C) 14 percent
D) 15.6 percent