Company has higher return on equity

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Dupont Analysis: Company A and Company B each had a return on assets (ROA) of 7.5% in 2017. However Company A has debt leverage (as measured by assets/stockholders' equity) twice as high as Company B's ratio. Which of the following statements is Correct?

A. Company A has a higher return on equity (ROE) than Company B.

B. Company B has a higher ROE than Company A.

C. Company B has more shares outstanding than Company A.

D. Company A has more working capital liquidity than Company B.

Reference no: EM131953129

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