A) Last year Rennie Industries had sales of $305,000, assets of $175,000, a profit margin of 5.3%, and an equity multiplier of 1.2. The CFO believes that the company could reduce its assets by $51,000. If so, how much would the ROE have changed? (Hint: Use the DuPont equation to find ROE before and after the proposed change, then take the difference.)
a. 4.10%
b. 4.56%
c. 5.01%
d. 5.52%
e. 6.07%
B) Brookman Inc.'s latest book value per share was $22.75, and it had 315,000 shares outstanding. If its assets are $12,796,875, then how much debt was outstanding?
?a. 4,586,179
b. 4,827,557
c. 5,081,639
d. 5,349,094
e. 5,630,625