Exhibit 12.5 Use the Information Below for the Following Problem(S)

question 16

Multiple Choice

Exhibit 12.5
Use the Information Below for the Following Problem(S)
An analyst wishes to estimate the share price for Ashley Corporation. The following information is made available:
Estimated profit margin = 15%
Total asset turnover = 2
Financial leverage = 1.2
Estimated dividend payout ratio = 75%
Required rate of return = 14%
Estimated EPS = $2.50
-Refer to Exhibit 12.5.Calculate the firm's ROE.

• A) 36%
• B) 25%
• C) 15%
• D) 10%
• E) 8%

---

Definitions:

Competitive Power

The ability of a company or nation to produce goods and services that meet the quality standards of the local and global markets at prices that are competitive and provide adequate returns on the resources employed.

Benchmarking

The act of evaluating one's business operations and performance indicators against the top standards or optimal practices observed in the sector or across different industries.

Reverse Engineering

The process of deconstructing a product or system to understand how it works, often with the goal of reproducing or improving it.

SWOT Analysis

A strategic planning technique used to identify the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.