How Much Will Gamma Inc

question 80

Multiple Choice

How much will Gamma Inc.'s equity holders earn given the following information: total asset turnover is 0.85, profit margin is 0.15, and debt-equity ratio is 0.25?

• A)9.56 percent
• B)15.94 percent
• C)16.96 percent
• D)38.25 percent Given D/E ratio then leverage ratio:
• 1 + D/E = 1 + 0.25 = 1.25
• ROE = PM x TAT x LR = 0.12 x 0.65 x 1.25

---

Definitions:

Hierarchical System

A structured organization of positions or levels in which entities are ranked one above the other based on authority or status.

Genetic Variation

The diversity of gene frequencies within a population, which contributes to differences in physical, physiological, and behavioral attributes.

Traditionally Defined

Characterized or specified according to historical or long-established patterns, norms, or interpretations.

Scientific Language

A precise language used within the scientific community that incorporates terms, definitions, and symbols specific to disciplines within science.