Assume the following relationships for the Caulder Corp.: Sales/Total assets ....................................... 1.3 Return on assets (ROA) ..............................

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Assume the following relationships for the Caulder Corp.:

Sales/Total assets .......................................     1.3×
Return on assets (ROA) ..............................     4.0%
Return on equity (ROE) ...............................    8.0%

Calculate Caulder’s profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital.

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