A Firm Has a Profit Margin of 12 Percent; Total

Multiple Choice

A firm has a profit margin of 12 percent; total asset turnover of 0.55 and an equity multiplier of 2.2. What is the firm's ROA and ROE?

A) ROA = 6.6 percent; ROE = 14.52 percent
B) ROA = 7.2 percent; ROE = 15.84 percent
C) ROA = 9.5 percent; ROE = 20.9 percent
D) ROA = 8.1 percent; ROE = 17.82 percent