You Are Given the Following Information About a Firm: the Growth

question 117

Multiple Choice

You are given the following information about a firm: The growth rate equals 8 percent;return on assets (ROA) is 10 percent;the debt ratio is 20 percent;and the stock is selling at $36.What is the return on equity (ROE) ?

• A) 14.0%
• B) 12.5%
• C) 15.0%
• D) 2.5%
• E) 13.5%

---

Definitions:

Whistle Blowers

Individuals who expose information or activity within a private, public, or government organization that is deemed illegal, unethical, or not correct.

Limited Liability

Limited Liability refers to the legal structure of a corporation where shareholders' financial responsibility is limited to the amount they invested in the company, protecting personal assets from company debts and liabilities.

Ownership Transfer

The legal process of transferring the title of an asset from one entity or individual to another.

Corporations

Entities recognized by law as separate from their owners, with the ability to own assets, incur liabilities, and engage in business activities.