Which of the Following Will Allow Your Firm to Achieve

Multiple Choice

Which of the following will allow your firm to achieve its targeted 16 percent ROA with an asset turnover of 2.5?

A) A leverage ratio of .0667
B) A P/E ratio of 14
C) A profit margin of 15 percent
D) A profit margin of 6.4 percent ROE = Profit margin x Asset turnover
) 16 = Profit margin x 2.50