Question
A firm uses 70% debt financing at 10% interest. Its ROE
rises despite flat operating profits. What explains this phenomenon?Solution
Increased ROE without rise in EBIT indicates positive financial leverage—use of debt to magnify returns to equity.
The average age of a class of 20 girls is 12 years. If 4 new girls having average age of 9 years join the class, then the average age of the class becomes:
The average score of 'x' boys is (x + 5), and the average score of 30 girls is (3x - 10). If the combined average score of all students is 60, then find...
The average of a set of 's' numbers is 50. If 120 is added to the set, then the average of the set becomes 50.4. Find the value of '4 X (s - 20)'.
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Average age of 25 students is 15 years. If 5 students leave the class, the average age decreases by 1 year. Find the average age of the students who lef...
Average marks scored by Vineet in five subjects are 70. The average marks scored by him (excluding his highest and lowest marks) are 50 and lowest marks...
In an examination the average marks of Rohit is 60. If he got 19 more marks in science and 26 more marks in maths then his average would have been 65. F...
- The average weight of 50 workers in a factory is 70 kg. Two workers weighing 75 kg and 68 kg leave the job and are replaced by two others weighing 72 kg an...
The total number of teachers in Department A and Department B together is 112. The number of teachers in Department A is 80% more...
The average weight of 4 persons is 35 kg. The heaviest person’s weight is 24 kg more than the lightest person’s weight. If the average weight of the...
