Question

25. ABC Bank has the following measures of bank profitability: EM = 14 and ROA = 1.05%. XYZ Bank measures are EM = 12.3 and ROA = 1.15%. Which bank has a higher ROE? A. ABC Bank B. XYZ Bank C. Both banks have the same ROE D. None of the above

Name: 25 abc bank has the following measures of bank profitability em 14 and roa 105 xyz bank measures are em 123 and roa 115 which bank has a higher roe a abc bank b xyz bank c both banks have th 56758
Uploaded: 2021-05-18T17:48:06-08:00
Duration: 1 min 43 s
Channel: Oluwadamilola Ameobi
Description: 25 abc bank has the following measures of bank profitability em 14 and roa 105 xyz bank measures are em 123 and roa 115 which bank has a higher roe a abc bank b xyz bank c both banks have th 56758

          25. ABC Bank has the following measures of bank profitability: EM = 14 and ROA = 1.05%. XYZ Bank measures are EM = 12.3 and ROA = 1.15%. Which bank has a higher ROE?
A. ABC Bank
B. XYZ Bank
C. Both banks have the same ROE
D. None of the above

25 abc bank has the following measures of bank profitability em 14 and roa 105 xyz bank measures are em 123 and roa 115 which bank has a higher roe a abc bank b xyz bank c both banks have th 56758

Added by Omar P.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Oluwadamilola Ameobi

05/18/2021

Step 1

The formula for ROE is: $ROE = EM \times ROA$ For ABC Bank, EM = 14 and ROA = 1.05% = 0.0105. $ROE_{ABC} = 14 \times 0.0105 = 0.147 = 14.7\%$ Show more…

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25. ABC Bank has the following measures of bank profitability: EM = 14 and ROA = 1.05%. XYZ Bank measures are EM = 12.3 and ROA = 1.15%. Which bank has a higher ROE? A. ABC Bank B. XYZ Bank C. Both banks have the same ROE D. None of the above