Answer:
ROE= 6%
Explanation:
Return on equity is the measure of a business profitability as related the owner's equity. It shows how well a company is making profits on shareholder funds.
Return on investment (ROE)= Profit Margin * Capital intensity ratio * Equity multiplier
To calculate the profit margin
Profit margin= Net income/Gross Income
Profit margin= 42,800/947,100
Profit margin= 0.045
Substitute in formula for ROE
ROE= 0.045* 0.87* 1.53
ROE= 0.06= 6%
