Question
A pension fund-sponsored company used debt to repurchase
equity, leveraging its balance sheet. RBC (Return on Equity) jumped from 12% to 18%. However, ECB (Economic Profit) remained unchanged. What does this imply?Solution
Rising ROE due to higher leverage reflects financial engineering, not necessarily improved economic profit. Since Economic Profit remains flat, the increased ROE is due to value transfer to equity holders via debt, not higher business profitability.
Which Institute has launched a new online training programme called 'Space Science and Technology Awareness Training (START)' for post-graduate and fina...
A man invested Rs. 10,000 at simple interest of 'x%' p.a. and received Rs. 20,000 after 2 years. If he had invested Rs. 25,000 at simple interest of 'x%...
Some effects of large production of biodegradable waste are mentioned below. Choose the INCORRECT statement.
In which of the following session Muslim league passed a resolution for the establishment of a separate homeland for the Muslims of British India?
Which of the following statement/s about the Central Bureau of Investigation is /are incorrect?
1. It enjoys the status of an autonomous offic...
When the Numismatic Society of India was established?
Which of the following statements is/are not correct about the book Hind Swaraj?
1.   Written by Gandhiji in 1909
2.   Written in ...
With reference to Poverty Gap Ratio, consider the following statements;
1. The poverty gap ratio is the mean shortfall of the total population ...
The fourth proportional to 10, 40, and 15 is complete it?
Which one of the following facts pertaining to the National Green Tribunal (NGT) is not correct?
