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LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt)....

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Finance

LeCompte Corp. has $312,900 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $620,000, and its net income after taxes was $24,655. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 20%. What profit margin would LeCompte need in order to achieve the 20% ROE, holding everything else constant?
Answers: a.

8.35%
b.

7.57%
c.

10.09%
d.

8.76%
e.

7.95%

Answer & Explanation Solved by verified expert
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