Compute return on net operating assets

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Question - Selected financial information from NOA turnover (average NOA equals ending NOA) is 3.

NOPAT margin equals 8%.

Leverage ratio (average NFO/average common equity) is 1.75, and the spread is 6%.

Required -

1. Compute return on net operating assets (RNOA).

2. Compute return on common equity using its three major components.

3. What is the "leverage advantage accruing to common equity"?

Reference no: EM133029795

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