Question: Suppose a stockholder owned thrift institution is projected to achieve a
Suppose a stockholder-owned thrift institution is projected to achieve a 0.90 percent ROA during the coming year. What must its ratio of total assets to equity capital be if it is to achieve its target ROE of 12 percent? If ROA unexpectedly falls to 0.80 percent, what assets-to-capital ratio must it then have to reach a 12 percent ROE?
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