Dew Point Dynamite, Inc

question 25

Multiple Choice

Dew Point Dynamite, Inc. generated a 1.23 total asset turnover in its latest fiscal year on assets of $2,112,077. The firm has total liabilities of $950,997. The firm's net profit margin was 10.3%. What is Dew Point's return on equity? Round to the nearest 0.1%.

• A) 23.1%
• B) 12.6%
• C) 5.5%
• D) 18.2%

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Definitions:

Amortized Bond Discount

The gradual reduction of a bond discount over the life of the bond, treated as additional interest expense over the bond's term.

Straight-line Method

A method of accounting for depreciation that allocates an asset's cost evenly over its useful life.

Called Bonds

Bonds that an issuer redeems before their maturity date at a specified call price.

Callable Bonds

Bonds that can be redeemed (called) by the issuer prior to their maturity date, typically at a premium above their par value.