1. Why is the DuPont identity a valuable tool for analyzing the performance of a firm? Discuss the types of information it reveals compared to ROE considered by itself.
2. The firm you founded currently has 11 million shares, of which you own 4 million. You are considering an IPO where you would sell 2 million shares for $29 each. If all of the shares sold are primary shares, how much will the firm raise? What will be your percentage ownership of the firm after the IPO?