Answer:
Option (C) is correct.
Explanation:
Return on Equity (ROE) = ?
Using DuPont Model, the Return on Equity (ROE) is calculated by using the following formula :
Return on Equity (ROE):
= Net Profit Margin × Total Asset Turnover × Equity Multiplier
= [Net Income ÷ Sales] × [1 ÷ Capital Intensity Ratio] × Equity Multiplier
= [$48,200 ÷ 947,100] × [1 ÷ 0.87] × 1.53
= 5.0892% × 1.1494 × 1.53
= 8.95%
