Primavera Holdings Has a Profit Margin of 25%,an Asset Turnover

Multiple Choice

Primavera Holdings has a profit margin of 25%,an asset turnover of 0.5 and financial leverage (assets to equity) of 1.5.Primavera has $20 billion in assets,of which half is in cash and marketable securities.Assume that Primavera earns a 3 percent after-tax return on cash and securities.What would Primavera's return on equity be if it paid out 90% of its cash and marketable securities as a dividend to shareholders?

A) Negative
B) Between 0% and 20%
C) Between 20% and 40%
D) between 40% and 60%
E) Greater than 60%