1) Last year Mason Inc. had the total assets turnover of= 2.25 and the equity multiplier of= 1.75. Its sales were= $185,000 and its net income was= $8,549. CFO thinks that company could have operated more resourcefully, lowered its costs, and increased its net income by =$4,800 without changing its sales, assets, or capital structure. Had it cut costs and increased its net income in this amount, by how much would ROE have modified?
2) ABC Company's stock has the beta of 1.50, risk-free rate is= 2.75%, and market risk premium is= 6.00%. Determine ABC's required rate of return using CAPM?
3) Hocking Manufacturing Company has the beta of= 0.65, whereas Levine Industries has the beta of 1.30. The needed return on stock market is= 11.00%, and risk-free rate is= 4.50%. Determine the difference between Hocking's and Levine's required rates of return?