If firm borrowing rate exceeds its roa then roe

Assignment Help Financial Management

Reference no: EM131347185

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

A. increase by an amount that depends on the equity/debt ratio.

B. increase by an amount that depends on the debt/equity ratio.

C. decline by an amount that depends on the equity/debt ratio.

D. decline by an amount that depends on the debt/equity ratio.

Reference no: EM131347185

Questions Cloud

Describe in words the shape of the histogram : PS390:The head of public safety notices that the average driving speed at a particular intersection averages μ = 35 mph with a standard deviation of σ = 7.5 mph. After a school speed limit sign of 20 mph is placed at the intersection, the first 40..

House in the future and recently received an inheritance : Future Value. You are hoping to buy a house in the future and recently recieved an inheritance of $22,000. You intend to use your inheritance as a down payment on your house. How long will it take to grow to $32,000 if you move into an account that p..

Expected to use the incremental cash flow approach : You are expected to use the incremental cash flow approach to calculate NPV of the replacement capital. What are the cash flow consequences of selling the old machine today instead of in 5 years?

Make a list of some of the issues : Make a list of some of the issues that will need to be resolved if American Airlines decides to routinely charge different prices to customers in the same class of service.

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

What mac should accompany the forged message to convince bob : You decide to tamper with the second message, changing it to 3. What MAC should accompany this forged message to convince Bob that it is legitimate?

Long-term debt accounts of huge-packing change : In 2015 Huge-Packing repurchased shares of common stock worth $5,241 million and made dividend payments of $894 million. Other financing activities raised $196 million, and Huge-Packing's total cash flow from financing was -$6,077 million. How much d..

Chains in-house instead of purchasing them from supplier : A bicycle manufacturer currently produces 206,000 units a year and expects output levels to remain steady in the future. It buys chains from an outside supplier at a price of $1.90 a chain. If the company pays tax at a rate of 35% and the opportunity..

When evaluating stock performance : When evaluating stock performance, ____ measures variability that is systematically related to market returns; ____ measures total variability of a stock's returns. If security prices fully reflect all market-related information (such as historical p..

User Account

All Pages