Chang Corp

question 72

Multiple Choice

Chang Corp.has $375,000 of assets,and it uses only common equity capital (zero debt) .Its sales for the last year were $550,000,and its net income was $25,000.Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%.What profit margin would the firm need in order to achieve the 15% ROE,holding everything else constant? Do not round your intermediate calculations.

• A) 10.02%
• B) 12.58%
• C) 10.23%
• D) 9.51%
• E) 8.59%

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