If the firm's rate of return on its assets is _____ than the cost of borrowing, then the owners' rate of return on equity will _____ as the firm uses _____ debt.
A. less, decrease, less
B. greater, decrease, more
C. greater, increase, more
D. less, increase, more
Answer: C
You might also like to view...
Assuming that Ska's cost of equity capital is 14% and it expects to grow earnings at a rate of 8% per year, we would expect Ska's P/E ratio to be
a. 8 b. 16.7 c. 14 d. 4.5
John is planning to utilize what he has learned in his internship with a nonprofit organization as evidence for a speech on the value of internships. What is John utilizing?
a. Personal knowledge and experiences b. Interviewing c. Survey d. Secondary research
What term is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and all factory overhead cost?
a. Standard costing b. Variable costing c. Absorption costing d. Marginal costing
The government provides rules that regulate consumer leasing
Indicate whether the statement is true or false