Firm A and Firm B have debt–total asset ratios of 39 percent and 29 percent and...
Firm A and Firm B have debt–total asset ratios of 39 percent and 29 percent and returns on total assets of 10 percent and 15 percent, respectively. What is the return on equity for Firm A and Firm B?
Homework Answers
| Firm A | Firm B | |||
| A | Debt to total asset ratio | 39% | 29% | |
| B | Equity to total asset ratio | 61% | 71% | |
| C | Return to total asset ratio | 10% | 15% | |
| Return on equity (C / D) | 16.39% | 21.13% | ||
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