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Answer :
To calculate Rogers, Incorporated's return on equity (ROE), we need to use the given values of equity multiplier, total asset turnover, and profit margin. The ROE represents the profitability of the company in relation to its shareholders' equity.
The formula for calculating ROE is ROE = Profit Margin × Total Asset Turnover × Equity Multiplier.
Given that the equity multiplier is 1.37, total asset turnover is 1.61, and profit margin is 9 percent (0.09), we can plug these values into the formula to calculate ROE.
ROE = 0.09 × 1.61 × 1.37 = 0.2064153
To express the result as a percentage, we multiply by 100 and round to two decimal places.
ROE = 20.64%
Therefore, Rogers, Incorporated's return on equity (ROE) is 20.64%. This indicates that for every dollar of shareholders' equity invested in the company, it generates a return of 20.64 cents. A higher ROE suggests better profitability and efficiency in utilizing shareholders' equity.
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