Return On Equity = 15.4%
The ratio of a company's net income to the equity of its shareholders is known as return on equity (ROE). A company's profitability and the effectiveness of its revenue generation are measured by its return on equity (ROE). A corporation is better at turning its equity funding into profits the higher the ROE. The following formula is used to determine the return on equity:
Return On Equity = Profit margin * Total asset turnover * Equity multiplier
ROE = 1.35 * 1.87* 6.1%
ROE = 2.53 x 6.1%
ROE = 15.4% (Approx)
Therefore, Return On Equity = 15.4%
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