Wilson Pharmaceutical Inc. has a profitability ratio of 0.19, an asset turnover ratio of 1.1, a price to earnings ratio of 15.4, and a total asset to equity ratio of 1.30. What is the firm's ROE?
A) 18.64%
B) 27.17%
C) 38.08%
D) 44.35%
Answer: B
Explanation: B) The ROE via the DuPont method is the profitability ratio × the total asset turnover × the total asset to equity ratio. = 0.19 × 1.1 × 1.3 = 0.2717 = 27.17%
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