Assume Meyer Corporation Is 100 Percent Equity Financed

Multiple Choice

Assume Meyer Corporation is 100 percent equity financed. Calculate the return on equity, given the following information: (1) Earnings before taxes = $1,500
(2) Sales = $5,000
(3) Dividend payout ratio = 60%
(4) Total assets turnover = 2.0
(5) Applicable tax rate = 30%

A) 25%
B) 30%
C) 35%
D) 42%
E) 50%