Solution-Calculate return on common equity

Calculate return on common equity

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Reference no: EM133002875

Below are some summary numbers for a firm for fiscal years 2019 and 2020 (in millions of dollars).

Required:

(a) Calculate return on common equity (ROCE), return on net operating assets (RNOA), net financial obligations (NFO), and net borrowing cost (NBC) for 2019 and 2020 [Note: use year-end value for the calculation].

(b) Calculate how much of the change in ROCE over the two years is due to:

I. Change in financial leverage

II. Change in spread

III. Change in profit margin

IV. Change in asset turnover

Reference no: EM133002875

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Calculate return on common equity

Reference no: EM133002875

Reference no: EM133002875

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