Arambada Holdings (AH) has a profit margin of 25%, an asset turnover of 0.5, and financial leverage

Fantastic news! We've Found the answer you've been seeking!

Question:

Arambada Holdings (AH) has a profit margin of 25%, an asset turnover of 0.5, and financial leverage (assets to equity) of 1.5. AH has $20 billion in assets, of which half is in cash and marketable securities. assets that AH earns a 3% after-tax return on cash and securities.

What would AH's return on equity be if it paid out 90% of its cash and securities as a dividend to shareholders?

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

See More Books

Posted Date: Dec 29, 2023 05:01 AM

See More Questions

Ques 1: What is the major complaint by firms concerning the Sarbanes-Oxley act of 2012? A. the legislative maximum allowable compensation for a CEO. B. the legal requirement to disclose project...
You, CA, have been working for Plener and Partners, Chartered Accountants (P&P), a mid-size CA firm, for three years. You have been assigned a new project for a long-term client of your firm, Oxford...
On a Saturday afternoon in May 2015, Robert Boyle and his wife Janet were sitting on the porch of their house on Saltspring Island, British Columbia, watching the fog roll in. The couple frequently...
Why do we need Normalization? How many forms of Normalization exist? What is the minimum normal form required? Describe each normal form List Normalization conversion process
Cometals, a New York commodities trading corporation, purchased 2,000 tons of Kenyan red beans from Tarbert Trading, an English commodities trading company. The beans would be shipped from a...
Prem Company acquired 60 percent ownership of Cooper Company's voting shares on January 1, 20X2. During 20X5, Prem purchased inventory for $20,000 and sold the full amount to Cooper Company for...
Differentiate technology from methodology and from method. Can you come up with an example that differentiates these concepts in a specific context, perhaps software development?
On January 1, 2014, Plains Power Company overhauled four turbine engines that generate power for customers. The overhaul resulted in a slight increase in the capacity of the engines to produce power....
Robert is planning to open his own residential building design business. What nontax factors should Robert consider as he chooses his business entity? Discuss and explain whether the nontax factors...
Northern Tractor is a manufacturer of commercial and consumer garden tractors. In their 30 years of operation Northern has followed a traditional manufacturing process that included maintaining a...
A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will a. decrease....
Describe why knowing which outcome you prefer is not adequate for making a choice under uncertainty.
What are some typical value drivers for digital products?
Discuss some of the different methods of decision making, and explain when you would use each one.
What is a decision tree? Briefly explain how a decision tree can be used in decision theory.
What assumptions do we make about the distributions of a and b? Why is this important in constructing confidence intervals?
38. Which of the following samples contains the greatest number of atoms? [c] 0.10 mol of Fe [d] 16 g He [a] 200 g of Pb [b] 3.0 mol of Ar [e] 6.022 103 0 molecules 39. How many moles are in 12.0 g...
The rate at which the temperature of an object changes is proportional to the difference between its own temperature and the temperature of the surrounding medium. Express this rate as a function of...
Explain why market-to-book multiples demonstrate less variance over time and across firms than do price-earnings multiples.
Tesla Motors manufactures high-performance electric vehicles that are extremely slick looking. Exhibit 3.18 presents the statement of cash flows for Tesla Motors for 2010 through 2012. REQUIRED...
Kentucky Gold (KG) holds 10,000 gallons of whiskey in inventory on October 31, 2017, that costs $225 per gallon. KG contemplates selling the whiskey on March 31, 2018, when it completes the aging...
Show that if two given networks are described by $Y_{i}=\sum_{j=1}^{M} T_{i j} X_{j}$ and $Y_{i}^{\prime}=$ $\sum_{j=1}^{M} T_{i j}^{\prime} X_{j}^{\prime}$, then these networks are...
Some FIR filters present a rational transfer function: (a) Show that the transfer function \[H(z)=\frac{\left(r^{-1} z ight)^{-(M+1)}-1}{r e^{\mathrm{j} 2 \pi /(M+1)} z^{-1}-1}\] corresponds to an...
Plot the pole-zero constellation as well as the magnitude response of the transfer function of Exercise 4.20 for $M=6,7,8$ and comment on the results. Exercise 4.20 Some FIR filters present a...

Arambada Holdings (AH) has a profit margin of 25%, an asset turnover of 0.5, and financial leverage

Question:

Expert Answer:

Calculating Arambada Holdings Return on Equity ROE after paying out 90 of cash and securities as dividends Heres how we can calculate AHs ROE 1 Calcul... View the full answer

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

Students also viewed these finance questions