Selected income statement and balance sheet data from Merck & Co for Year 9 are reproduced below:

Merck & Co, Inc.
Year 9 Selected Financial Data (millions)
Income statement data:
Sales Revenue	7120
Depreciation	230
Interest Expense	10
Pretax Income	2550
Income Taxes	900
Net Income	1650
Balance Sheet Data:
Current Assets	4850
Fixed Assets, Net	2400
Total Assets	7250
Current Liabilities	3290
Long-term Debt	100
Shareholders' Equity	3860
Total Liabilities & Shareholders' Equity	7250

Required:

1. Calculate return on common equity for Year 9 using year-end amounts and assuming no preferred dividends.
2. Disaggregate Merck's ROA. Comment on Merck's use of leverage. Assume all assets and current liabilities are operating and a 35% tax rate.