A company's return on assetsshould be greater than itsreturn on equity. True orFalse?

A company's return on assets (ROA) does not necessarily have to be greater than its return on equity…

Answered: A company's return on assets should be…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter7: Introduction To Financial Statement Analysis

Section: Chapter Questions

Problem 8Q

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Similar questions

The cost of equity is _______. A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnover
True or false?
Give me accurate answer
Explain why the required rate of return on a firm's assets must be equal to the weighted average cost of capital associated with its liabilities and equity. Explain using the concepts from the course.
Use B&M’s data and the free cash flow valuation model to answer the following questions: What is its estimated value of operations? What is its estimated total corporate value? (This is the entity value.) What is its estimated intrinsic value of equity? What is its estimated intrinsic stock price per share?
Why does an increase in the ratio of current assets to total assets decrease both profits and risk as measured by net working capital? How does changes in the ratio of current liabilities to total assets affect profitability and risk?
Which one of the following is minimized when the value of the firm is maximized? A- WACC B- Return on equity C-Debt D-Taxes E- Bankruptcy costs
Is this a right formula? Market Value of Equity = Market capitalization - cash and investment + market Debt Value
The higher the _____________, the higher the financial risk, and the higher the ____________. a. Interest rate, business risk b. Financial leverage, operating risk c. Financial leverage, cost of capital d. Fixed operating cost, financial risk
why an increase in cost of debt will increase cost of capital associated with business risk and financial risk?
The ability of a company to meet its long-term obligations is termed: A) Profitability B) Solvency C) Efficiency D) Liquidity
Which of these would best improve a firm's liquidity position? *a. Lower profitabilityb. Higher capital spendingc. Higher need for noncash current assets on the balance sheetd. Declaration of stock dividends

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A company's return on assets should be greater than its return on equity. True or False?