What is return on equity

Assignment Help Financial Management
Reference no: EM13826771

Keller Cosmetics maintains an operating profit margin of 4.0% and asset turnover ratio of 2.0. The ROA is 8%.

If its debt-equity ratio is 1, its interest payments and taxes are each $7,000, and EBIT is $22,000, what is its Return on Equity (ROE)?

Reference no: EM13826771

Questions Cloud

What is GPCs current equilibrium stock price : Gator Products Company (GPC) is at its optimal capital structure of 70 percent common equity and 30 percent debt. GPC’s WACC is 14 percent. GPC has a marginal tax rate of 40 percent. Next year’s dividend is expected to be $2 per share, and GPC has a ..
Covered as workers compensation claim : It’s the end of the summer and your firm has its annual Family Picnic Day on the Saturday of Labor Day weekend. It is a big event: games for kids, a magician who makes balloon animals, tons of great food, kegs of beer, a band for musical entertainmen..
Constructing three kinds of housing complexes : Emaar is a real estate company based in Dubai and is considering for constructing three kinds of housing complexes. The three kinds of complexes are: small complex, medium complex and large complex.
Report on competitor market positioning and analysis : Report on Competitor Market Positioning and Analysis
What is return on equity : Keller Cosmetics maintains an operating profit margin of 4.0% and asset turnover ratio of 2.0. The ROA is 8%. If its debt-equity ratio is 1, its interest payments and taxes are each $7,000, and EBIT is $22,000, what is its Return on Equity (ROE)?
Residual distribution policy : Puck’s Company has a capital budget of $1.1 Million. Puck’s company desires to maintain a target capital structure which is 35% debt and 65% equity. Puck’s company forecasts that its net income this year will be $800,000. If Puck’s company follows a ..
What is counts unlevered beta : Counts Accounting has a beta of 1.40. The tax rate is 35%, and Counts is financed with 35% debt. What is Counts' unlevered beta?
Unlevered beta : Company ZZ has a beta of 1.40. The tax rate is 35%, and Company ZZ is financed with 35% debt. What is Company ZZ’s unlevered beta?
Compute quantities for both the merged firm : The question is related to economics and it is about two firms in the Cornout market merge into one firm, what would the merger result in? How much of marginal cost would prevail in the market, etc.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the total cost of training

The average turnover rate was 23% percent per year. The cost to recruit and train one new employee was $56,625. To address the turnover problem, the company developed a skills training program that averaged 80 hours per year per employee. What is the..

  Three key figures on the cash flow statement

Which of the three key figures on the Cash Flow Statement is the most important for assessing the financial health of the business?

  The dunning million finance its expansion into new markets

The Dunning Co. needs to raise $66.7 million to finance its expansion into new markets. The company will sell new shares of equity via a general cash offering to raise the needed funds. The offer price is $67 per share and the company  underwriters c..

  What is the expected price of the stock at time

Bonnie’s Bee Farm Inc. just had their annual board of directors meeting, where they decided they plan to start paying dividends in three years (at time 3). The first dividend will be $1.00. After that, they plan to increase the dividend by $.25 in ea..

  What is the expected dollar return on the gamble

Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero if a tail. What is the expected dollar return on the ..

  Management accounting advice to not-for-profit firms

Cray-Z Consultants provides management accounting advice to not-for-profit firms. It employs three levels of consultants, based on experience and education: partner, senior, and associate. When Cray-Z considers bidding on jobs, it estimates the costs..

  Based on an internal rate of return analysis

RealTurf is considering purchasing an automatic sprinkler system for its sod farm by borrowing the entire $20,000 purchase price. The loan would be repaid with four equal annual payments at an interest rate of 12%/year.  Show the internal rate of ret..

  What is the current value of one share of this stock

The Bell Weather Co. is a new firm in a rapidly growing industry. The company is planning on increasing its annual dividend by 19 percent a year for the next 4 years and then decreasing the growth rate to 3 percent per year. The company just paid its..

  Investigate the realistic assumptions for your location

Investigate the realistic assumptions for your location and include the information you found in the analysis. Create a paper in one page paper.

  Debt analysis

Springfield Bank is evaluating Creek Enterprises, which has requested a $4,000,000 loan, to assess the firm’s financial leverage and financial risk. On the basis of the debt ratios for Creek, along with the industry averages (see the top of the next ..

  Perform financial analysis of a public company

How does the above relate to the market that the business is in, i.e. need to perform competitive and economic analysis and macro economic analysis is company's sales cyclical or counter cyclical for example

  What are the benefits of restructuring

What are the benefits of restructuring and please provide two real life examples. Discuss the objectives of corporate governance and why this has led to increased costs for publicly traded companies. What are the key elements of business valuations a..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd