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Assume Meyer Corporation is 100 Percent Equity Financed

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Assume Meyer Corporation is 100 percent equity financed. Calculate the return on equity, given the following information:

(1) Earnings before taxes = $1,500
(2) Sales = $5,000
(3) Dividend payout ratio = 60%
(4) Total assets turnover = 2.0
(5) Tax rate = 30%

25%
30%
35%
42%
50%.

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Solution Summary

The solution assumes that Meyer Corp. is 100% equity financed and calculates the return on equity.

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