Question 1
Last year, Vaughn Corp. had sales of $462,000 and a net income of $20,540, and its year-end assets were $331,000. The firm’s total-debt-to-total-assets ratio was 46.0%. Based on the DuPont equation, what was Vaughn’s ROE?
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10.05%
◦
11.53%
◦
12.65%
◦
13.78%
Question 2
LeCompte Corp. has $406,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $750,000, and its net income after taxes was $30,200. Shareholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 18%. What profit margin would LeCompte need in order to achieve the 18% ROE, holding everything else constant?
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9.52%
◦
9.60%
◦
9.74%
◦
9.88%
Common arachnids.
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Some common eye disorders. (A) Conjunctivitis (“pinkeye”).
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