Вопрос 3 Moogle, Inc. is in the same business as Google, Inc., but has recently retired all its debt to become an all-equity firm. Its return on equity has dropped from 12.00% to 10.75% as a result of this. Google, Inc. continues to have debt in its capital structure, and its debt-to-equity ratio is 30.00%. What is the percentage return on assets of Google, Inc.? (Allow two decimals in the percentage but do not enter the % sign.)

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Question:

Вопрос 3 Moogle, Inc. is in the same business as Google, Inc., but has recently retired all its debt to become an all-equity firm. Its return on equity has dropped from 12.00% to 10.75% as a result of this. Google, Inc. continues to have debt in its capital structure, and its debt-to-equity ratio is 30.00%. What is the percentage return on assets of Google, Inc.? (Allow two decimals in the percentage but do not enter the % sign.)

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Return on asset is 18.46 percentExplanation:Given information's areReturn on equity of Google inc., = 12.00% ( google inc does not change it's capital structure so return remains at  12%)debt-to-equity ratio =  30.00 percent Percentage return on assets of Google, IncReturn on asset = Net income ÷ average total assets     debt-to-equity ratio = Total liabilities ÷ stake holder's equityhere no amount is given for any account let us make an assumption as follows.,debt-to-equity ratio =  30.00 percentThe stack holder's equity  is $100 ( 30 ÷ 100 = 0.30 or 30 percent)[tex]The stack holder's equity is $100 ( 30 ÷ 100 = 0.30 or 30 percent)[/tex] Total Assets considers both Equity and Debt       so the Average assets = (debt + equity)÷ 2  Average assets = ($30 + $100 ) ÷ 2 = $65[tex]Average assets = ($30 + $100 ) ÷ 2 = $65[/tex]Net income is the return attributed to the equity holders here., $100 be the share holders equity get from debt-equity ratioReturn on equity = 0.12 = Net income ÷ share holders fundNet income = 12 percent = $100 × 12÷100 = $12 [tex]Net income = 12 percent = $100 × 12÷100 = $12[/tex]Return on asset = Net income ÷ average total assets Return on asset  = 12÷ 65 = 0.1846 or 18.46 percent[tex]Return on asset = 12÷ 65 = 0.1846 or 18.46 percent[/tex]  

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