A Firm Has an ROA of 19%,a Debt/equity Ratio of 1.8,a

question 78

Multiple Choice

A firm has an ROA of 19%,a debt/equity ratio of 1.8,a tax rate of 30%,and the interest rate on its debt is 7%.Its ROE is _________.

• A) 15.12%
• B) 28.42%
• C) 37.24%
• D) 40.60%

---

Definitions:

Regression Analysis

A statistical method used to examine the relationship between a dependent variable and one or more independent variables.

Descriptive Statistics

Statistical procedures that summarize, present, and describe data sets in terms of properties like mean, median, and variance.

Least Squares Regression

A statistical method used to determine the line of best fit by minimizing the sum of the squares of the vertical distances of the points from the line.

Calories

Units of energy measurement used to quantify the energy that foods provide to the body.