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5. If we know that a firm has a net profit margin of 4.5%, total asset...

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Finance

5. If we know that a firm has a net profit margin of 4.5%, totalasset turnover of 0.72, and a financial leverage multiplier of1.43, what is its ROE? What is the advantage to using the DuPontsystem to calculate ROE over the direct calculation of earningsavailable for common stockholders divided by common stockequity?

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DuPont equation is used to calculate return on equity ROE in following manner ROE Profit margin Total assets turnover Financial leverage multiplier Where Profit margin 45 Total assets    See Answer
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5. If we know that a firm has a net profit margin of 4.5%, totalasset turnover of 0.72, and a financial leverage multiplier of1.43, what is its ROE? What is the advantage to using the DuPontsystem to calculate ROE over the direct calculation of earningsavailable for common stockholders divided by common stockequity?

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