Use the following ratios for Crimson Industries Inc., to estimate the firm's ROE. Net profit margin = 8.62%, asset turnover = 1.68, return on assets = 14.48%, financial leverage = 1.35, debt to equity ratio = 35%
A) 2.10%
B) 0.99%
C) 5.07%
D) 19.55%
D
Explanation: D) ROE = Net Profit Margin * Asset Turnover * Financial Leverage = 8.62% * 1.68 * 1.35 = 19.55%.
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