The Merriam Company Has Determined That Its Return on Equity

question 9

Multiple Choice

The Merriam Company has determined that its return on equity is 15 percent. Management is interested in the various components that went into this calculation. You are given the following information: total debt/total assets = 0.35 and total assets turnover = 2.8. What is the profit margin?

• A) 3.48%
• B) 5.42%
• C) 6.96%
• D) 2.45%
• E) 12.82%

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