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.
Answered by MRSAmercasn
correct!
Answered by Anonymous
More Equity means higher denominator. Higher denominator, lower percentage, lower ROE
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