Question: Given the following information, determine the Return on Equity (ROE) and the driver for the higher ROE of Greenvale Hospital relative to the industry. Greenvale

Given the following information, determine the Return on Equity (ROE) and the driver for the higher ROE of Greenvale Hospital relative to the industry.

Greenvale Hospital Net Income $110,000,000

Revenues $950,000,000 Assets $4,500,000,000

Equity $1,500,000,000

Industry Statistics: Total Margin = 15%

Total Asset Turnover = 21%

Equity Multiplier = 2

Industry ROE = 6.3%

a. Greenvale's ROE is 7.33% and the driver for the higher ROE is better margins.

b. Greenvale's ROE cannot be determined.

c. Greenvale's ROE is 11.6% and the driver for the better performance is its equity multiplier (higher leverage or debt)

d. Greenvale's ROE is 7.33% and the driver for the higher ROE is its equity multiplier (higher leverage

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