Question

Assume you are given the following for Stackelberg industries: Return on Assets (ROA) = 8% Debt...

Assume you are given the following for Stackelberg industries:
Return on Assets (ROA) = 8%
Debt Ratio = 60%
The return on equity (ROE) for Stackelberg industries is:
0 0
Add a comment Improve this question Transcribed image text
Answer #1

ROA = Net Profit/Total Assets

Total Assets be A

Net Profit = 0.08*A

Debt Ratio = Total Debt/Total Assets = (asset - equity)/Asset

Debt Ratio = 1 - Equity/Assets

Equity = 0.40*A

ROE = Net Profit/Equity

ROE = 0.08A/0.40A

ROE = 20%

Add a comment
Know the answer?
Add Answer to:
Assume you are given the following for Stackelberg industries: Return on Assets (ROA) = 8% Debt...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.2× Return on assets (ROA) 5.0%...

    Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.2× Return on assets (ROA) 5.0% Return on equity (ROE) 9.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin:   % Debt-to-capital ratio:   %

  • Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.3x Return on assets (ROA) 4.0%...

    Assume the following relationships for the Caulder Corp.: Sales/Total assets 2.3x Return on assets (ROA) 4.0% Return on equity (ROE) 13.0% Calculate Caulder's profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: % Debt-to-capital ratio: %

  • Assume the following relationships for the Caulder Corp.: 1.5x Sales/Total assets Return on assets (ROA) Return...

    Assume the following relationships for the Caulder Corp.: 1.5x Sales/Total assets Return on assets (ROA) Return on equity (ROE) 6% 12% a. Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. % b. Calculate Caulder's debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. %

  • Problem 3-8 Profit Margin and Debt Ratio Assume you are given the following relationships for the...

    Problem 3-8 Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.7 Return on assets (ROA) 4% Return on equity (ROE) 8% 1.Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. % 2.Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. % 3.Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio....

  • Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5x Return on assets (ROA) 5%...

    Assume the following relationships for the Caulder Corp.: Sales/Total assets 1.5x Return on assets (ROA) 5% Return on equity (ROE) 14% Calculate Caulder's profit margin assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places. % Calculate Caulder's debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital. Round your answer to two decimal places.

  • Problem 3-8 Profit Margin and Debt Ratio Assume you are given the following relationships for the...

    Problem 3-8 Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: 1.9 Sales/total assets Return on assets (ROA) Return on equity (ROE) 1. Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. 2. Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. 3. Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do...

  • Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation:...

    Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets Return on assets (ROA) Return on equity (ROE) 1.2 3% 5% Calculate Haslam's profit margin and liabilities-to-assets ratio. Do not round intermediate calculations. Round your answers to two decimal places. Profit margin: Liabilities-to-assets ratio: % Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places.

  • Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation:...

    Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.4 Return on assets (ROA) 3% Return on equity (ROE) 8% 1. Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. 2.14 % 2. Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. 3. Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets...

  • Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation:...

    Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 2 Return on assets (ROA) 4% Return on equity (ROE) 7% Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. % Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. % Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not...

  • Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation:...

    Profit Margin and Debt Ratio Assume you are given the following relationships for the Haslam Corporation: Sales/total assets 1.4 Return on assets (ROA) 3% Return on equity (ROE) 5% 1-Calculate Haslam's profit margin. Do not round intermediate calculations. Round your answer to two decimal places. 2-Calculate Haslam's liabilities-to-assets ratio. Do not round intermediate calculations. Round your answer to two decimal places. 3-Suppose half of Haslam's liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT