A firm has a debt-to-equity ratio of 40%, a debt of $250,000, and a net income...

    

Transcribed Image Text:

A firm has a debt-to-equity ratio of 40%, a debt of $250,000, and a net income of $100,000. Determine Return on Equity. Hint: this will be derived from the formulas: debt-to-equity ratio = debt/equity; and return on equity = net income/equity- (you must determine equity, in order to determine return on equity). A firm has a debt-to-equity ratio of 40%, a debt of $250,000, and a net income of $100,000. Determine Return on Equity. Hint: this will be derived from the formulas: debt-to-equity ratio = debt/equity; and return on equity = net income/equity- (you must determine equity, in order to determine return on equity).