# Question

For fiscal year 2011, Peet’s Coffee and Tea (PEET) had a net profit margin of 4.78%, asset turnover of 1.73, and a book equity multiplier of 1.21.

a. Use this data to compute Peet’s’ ROE using the DuPont Identity.

b. If Peet’s managers wanted to increase its ROE by one percentage point, how much higher would their asset turnover need to be?

c. If Peet’s net profit margin fell by one percentage point, by how much would their asset turnover need to increase to maintain their ROE?

a. Use this data to compute Peet’s’ ROE using the DuPont Identity.

b. If Peet’s managers wanted to increase its ROE by one percentage point, how much higher would their asset turnover need to be?

c. If Peet’s net profit margin fell by one percentage point, by how much would their asset turnover need to increase to maintain their ROE?

## Answer to relevant Questions

For fiscal year 2011, Starbucks Corporation (SBUX) had total revenues of $11.70 billion, net income of $1.25 billion, total assets of $7.36 billion, and total shareholder’s equity of $4.38 billion.a. Calculate the ...Your firm has identified three potential investment projects. The projects and their cash flows are shown here:Suppose all cash flows are certain and the risk-free interest rate is 10%.a. What is the NPV of each project?b. ...The table here shows the no-arbitrage prices of securities A and B that we calculated.a. What are the payoffs of a portfolio of one share of security A and one share of security B?b. What is the market price of this ...You are thinking of retiring. Your retirement plan will pay you either $250,000 immediately on retirement or $350,000 five years after the date of your retirement. Which alternative should you choose if the interest rate ...Suppose you currently have $5000 in your savings account, and your bank pays interest at a rate of 0.5% per month. If you make no further deposits or withdrawals, how much will you have in the account in five years?Post your question

0