A Firm Has an ROA of 14%, a Debt/equity Ratio

question 86

Multiple Choice

A firm has an ROA of 14%, a debt/equity ratio of 0.8, a tax rate of 35%, and the interest rate on the debt is 10%. The firm's ROE is

• A) 11.18%.
• B) 8.97%.
• C) 11.54%.
• D) 12.62%.

---

Definitions:

Ebbinghaus

refers to Hermann Ebbinghaus, a German psychologist known for his pioneering work in the study of memory, including the discovery of the forgetting curve and the spacing effect.

Free Recall

A process in memory testing in which a person must retrieve information without being provided with cues or prompts.

Social Security

A government system that provides monetary assistance to people with an inadequate or no income.

Savings Method

A research method used in psychology to measure the amount of learning retained after some period, often through assessing the speed or amount of relearning compared to the initial learning phase.