Samuelson's has a debt-equity ratio of 21 percent, sales of $5,500, net income of $900, and...

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Question

Samuelsons has a debt-equity ratio of 21 percent, sales of $5,500, net income of $900, and total debt of $4,700. What is the

Answer 1

Answer #1

Hi

Return on equity = Net income/Total equity

Debt to equity = 0.21

equity = Debt/0.21

=4700/0.21

= $22,380.95

Hence return on equity = 900/22380.95

= 4.02%

Thanks

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Answer 2

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