Greg Is Interested in Investing in a Small Company, and He

question 63

Multiple Choice

Greg is interested in investing in a small company, and he thinks Allen, Co. might be a good investment. He has been given the following information and would like to know the return on stockholder's equity (ROE) . Assume Allen's marginal tax rate is 40%. $\begin{array}{lr}\text {Earnings before taxes(EBT) : }&\text {\$ 3 million }\\\text { Retum onSales(ROS) :}&\text {3.6 \% }\\\text {Total liabilities: }&\text {\$ 15.0 million }\\\text {Total stockholded's equity: }&\text {\$10.0 million }\\\end{array}$

• A) 12%
• B) 20%
• C) 15%
• D) 18%

---

Definitions:

Shared Behaviors

Actions or practices that are commonly exhibited by members of a group, organization, or community.

Organizational Culture

The shared values, beliefs, and norms that influence the way employees behave within an organization.

Organizational Rituals

Set activities or routines that are performed regularly within an organization, contributing to its culture and unity.

Company Motto

A short, memorable phrase that encapsulates the ideology, purpose, or culture of a company.