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What effect would you expect this new leverage policy

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This year Andrews achieved an ROE of 5.6%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE? 

Select: 1 
a. Andrews ROE will remain the same. 
b. Andrews ROE will increase. 
c. Andrews ROE will decrease. 

Reference no: EM131129661

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