Would be required to double the roe

Assignment Help Basic Statistics
Reference no: EM132073486

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25, and a profit margin of 10%. The Board of Directors is unhappy with the current return on equity (ROE), and they think it could be doubled. This could be accomplished (1) by increasing the profit margin to 12% and (2) by increasing debt utilization. Total assets turnover will not change. What new debt ratio, along with the new 12% profit margin, would be required to double the ROE?

Reference no: EM132073486

Questions Cloud

What is the bond modified duration : What is the bond's modified duration? what is the predicted price change in dollars based on the bond's duration?
Review problem on accumulated depreciation : Reversing Rapids Co. purchases an asset for $170,894. This asset qualifies as a five-year recovery asset under MACRS. The five-year expense percentages.
What effective annual rate is needy paying : What effective annual rate (EAR) is Needy paying?
What is the impact of government on emerging technologies : What is the impact of government on emerging technologies? Requirements for innovation policy in emerging high-tech industries?
Would be required to double the roe : Total assets turnover will not change. What new debt ratio, along with the new 12% profit margin, would be required to double the ROE?
What is the expected return on rkp : The risk-free rate of return is currently 0.04, whereas the market risk premium is 0.05. If the beta of RKP, Inc., stock is 1.4.
Evaluate the integral in given problem : Evaluate the integral in given problem
Explain the responsibilities of the chairperson : What information should be covered when briefing the minute-taker? Explain the responsibilities of the chairperson in bringing meetings to a close.
Firm weighted average cost of capital : You have gathered the following information for Frosty Ale, Inc., which has a 40 percent marginal tax rate.

Reviews

Write a Review

Basic Statistics Questions & Answers

  Confidence interval for mean secchi dish measurement

Crete a 90% confidence interval for mean Secchi dish measurement.

  The average score for 49 teenage boys playing a certain

the average score for 49 teenage boys playing a certain computer game was 75000 points per player. if the standard

  Determine randomly chosen expense account claim

The first digit of a randomly chosen expense account claim follows Benford's law. Consider the events A = first digit is 7 or greater and B = first digit is odd

  Computing probability that the ball is not red

A ball is drawn from a bag containing 13 red balls numbered 1-13 and 5 white balls numbered 14-18.

  Using the december follow-up data listed below is there a

using the december follow-up data listed below is there a significant difference between school a children and school b

  A normally distributed variable with mean value

a. If cork diameter is a normally distributed variable with mean value 3.04 cm and standard deviation .02  cm, what is the probability that a randomly selected cork will conform to specification?

  Find z score and percentage of area do fall gpa in

If they have a GPA that falls in the range between 2.50 and 3.50, what is their z score and percentage of the area do they fall in?

  Probability that a randomly selected passener

Find the probability that a randomly selected passenger has a waiting time less than 0.75 minutes.

  What is the probability the next is also blue

(a) Suppose you draw a chip and it is blue. If drawing without replacement, what is the probability the next is also blue?

  Concepts and applications using the 68-95-99-7 rule assume

concepts and applicationsusing the 68-95-99-.7 rule. assume the resting pulse rates for a sample of individuals are

  Probability that typical hospital have 14 or more infections

Considering this probability, comment on whether Grove Tree Mountain might not be a typical hospital in terms of its patients' likelihood of picking up an infection.

  A machine that cuts corks for wine bottles operates in such

a machine that cuts corks for wine bottles operates in such a way that the distribution of the diameter of the corks

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd