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Ketek,IncHas $400,000 in Assets and One Liability in the Form

Question 30

Multiple Choice

Ketek,Inc.has $400,000 in assets and one liability in the form of a $150,000 note payable with a 12% annual interest rate.Assuming Ketek's tax rate is 30% and the firm generates a 15% return on its assets,Ketek's rate of return on owners' equity is:


A) 7.20%
B) 11.76%
C) 15.00%
D) 16.80%

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