Return on equity-what is the amount of the net income

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1. A firm has a return on equity (ROE) of 15 percent. The debt-to-equity ratio is 50 percent. The total asset turnover is 1.25 and the net profit margin is 6 percent. If the firm's total equity is $3,200, what is the amount of the net income?

2. Suppose an executive has been granted 1,000 stock options (the right to buy at the strike price) with a strike price equal to the current stock price of $3.00 per share. What is the manager's payoff if these options are exercised when the stock price is $4.25 per share?

Reference no: EM131829122

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