Asked by Sally
Firm A and firm B have debt-total asset ratios of 35% and 30% and ROA of 12% and 11%, respectively. Which firm has a greater ROE?
I think that it is firm B since it has more equity financing its assets.
I think that it is firm B since it has more equity financing its assets.
Answers
Answered by
MRSAmercasn
correct!
Answered by
Anonymous
More Equity means higher denominator. Higher denominator, lower percentage, lower ROE
There are no AI answers yet. The ability to request AI answers is coming soon!
Submit Your Answer
We prioritize human answers over AI answers.
If you are human, and you can answer this question, please submit your answer.