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If Roten Rooters, Inc., has an equity multiplier of 1.27, total asset turnover of 2.10, and a profit margin of 6.1 percent, what is its ROE?

Respuesta :

Answer:

16.27%

Explanation:

Given that,

Equity multiplier = 1.27

Total asset turnover = 2.10

Profit margin = 6.1 percent

Here, the return on equity is calculated by multiplying profit margin, asset turnover and equity multiplier.

Return On Equity:

= (Profit margin) × (Asset turnover) × (Equity multiplier)

= (0.061) × (2.10) × (1.27)

= 0.1627

= 16.27%

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