Determination of new debt ratio

Reference no: EM1364822

A company has a debt ratio of 0.5, total assets turnover of 0.25, and profit margin of 10%. The company wants to double ROE by increasing profit margin to 12%, leaving asset turnover the same, and increasing debt utilization. What new debt ratio, along with the new 12% profit margin, would be required to double the Rate of Return?

Reference no: EM1364822

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