Question

Which of the following causes of an increase in

Q: Answer- Which of the following causes of an increase in return on equity is most likely a positive sign fo...

When net income is increasing more than the book value of equity, return on equity ROE will increase at a faster rate. This is a positive sign for investors. When firm issues fresh debt, it comes under an obligation to pay interest expenses, and that are paid out of profits, this decreases the ROE and is not a positive sign for investors.

return on equity is most likely a positive sign for a firm’s equity investors?

A Net income is increasing at a faster rate than the book value of equity

B Net income is decreasing at a faster rate than the book value of equity

C A firm issues fresh debt

D All of the above

E None of the above

Practice Next

More Financial Management Questions

'क्षुद्र' का विलोम शब्द क्या होगा?
किस समास में पहला पद प्रधान होता है :
निम्नलिखित में से “पृथ्वीराज रासो” के रचनाकार कौन है?
इनमें से युक्त वाक्य छाँटिए-
चींटियाँ _____________ मे रहती हैं Iवाक्य मे रिक्त स्थान मे शब्द आए�...
कौन-सा शब्द 'ब्रह्मा' का पर्यायवाची नहीं है?
'निकेतन' किसका पर्यायवाची है?
जो कभी हार न माने, उसे क्या कहते हैं?
'डॉक्टर ने रोगी को दवा दी' कारक का भेद लिखिए।
सूची- I को सूची – II से सुमेलित कीजिए और सूचियों के नीचे दिए ग�...

Which of the following causes of an increase in

Solution