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1. Burger Corp has $500,000 of assets, and it uses only common equity capital (zero debt). Its sales for the last year were $600,000, and its net income after taxes was $25,000. Stockholders recently voted in a new management team that has promised to lower costs and get the return on equity up to 15%. What profit margin would Burger need in order to achieve the 15% ROE, holding everything else constant?
8.00%
9.50%
11.00%
12.50%
14.00%
2. Cooper Inc's latest EPS was $4.00, its book value per share was $20.00, it had 200,000 shares outstanding, and its debt ratio was 40%. How much debt was outstanding?
$2,333,333
$2,666,667
$3,000,000
$3,333,333
$3,666,667
8.00%
9.50%
11.00%
12.50%
14.00%
2. Cooper Inc's latest EPS was $4.00, its book value per share was $20.00, it had 200,000 shares outstanding, and its debt ratio was 40%. How much debt was outstanding?
$2,333,333
$2,666,667
$3,000,000
$3,333,333
$3,666,667