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    harmoni5858's Avatar
    harmoni5858 Posts: 1, Reputation: 1
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    #1

    Sep 20, 2011, 01:35 PM
    How do you find th ROE?
    A firm has a profit margin of 2 percent and an equity multiplier of 2.0. Its sales are 100 million, and it has total assets of 50 million what is its roe
    ArcSine's Avatar
    ArcSine Posts: 969, Reputation: 106
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    #2

    Sep 22, 2011, 04:44 AM
    ROE is the ratio of Net Income to Equity.

    From the given profit margin and sales, you can determine Net Income. From the equity multiplier and total assets you can derive Equity.

    Back to you for the wrap up.
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