Which of the Following Will Allow Your Firm to Achieve

question 54

Multiple Choice

Which of the following will allow your firm to achieve its targeted 16% ROA with an asset turnover of 2.5?

• A)a leverage ratio of.0667
• B)a P/E ratio of 14
• C)a return on equity of 25%
• D)a profit margin of 6.4%

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Definitions:

Dividend Per Share

The amount of dividend that a company pays out to each shareholder per share.

Trading Securities

Financial assets such as stocks and bonds held by an investor with the intent of selling them in the short term to profit from price fluctuations.

Unrealized Gains

Profits that have been achieved on paper due to an investment increasing in value but have not yet been cashed in by selling the asset.

Fair Value

A measurement of the price at which an asset or liability could be exchanged in an orderly transaction between market participants at the measurement date.