If a firms borrowing rate exceeds its ROA

Assignment Help Financial Management

Reference no: EM131511821

If a firm’s borrowing rate exceeds its ROA, then ROE will ______.

a. Decline by an amount that depends on the equity/debt ratio.

b. Decline by an amount that depends on the debt/equity ratio.

c.Increase by an amount that depends on the equity/debt ratio.

d. Increase by an amount that depends on the debt/equity ratio.

Reference no: EM131511821

Questions Cloud

Suppose the bond describes previously : Suppose the bond describes previously has a price of $1,100 five years after it is issued. What is the YTM at that time?

The quality of earnings is to look for red flags : One step in assessing the quality of earnings is to look for red flags.

Constructan amortization table for the first six months : Constructan amortization table for the first six months of the loan.

Inventory turnover and accounts receivable turnover : Analysts maintain that two of the most important ratios are inventory turnover and accounts receivable turnover.

If a firms borrowing rate exceeds its ROA : If a firm’s borrowing rate exceeds its ROA, then ROE will ______.

The company can use to hedge its exchange rate risk : Which of the following is not one way that the company can use to hedge its exchange rate risk? What happens to the company’s profit if the dollar strengthens?

Compared to capitalized leases in the first year of a lease : Compare the effects of operating leases as compared to capitalized leases in the first year of a lease on the following items listed.

What is the portfolios equilibrium expected return : According to APT, what is the portfolio's equilibrium expected return?

Understood by management of multinational corporation : Which of the following may not be fully understood by management of a multinational corporation?

User Account

All Pages