Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 19, Problem 7PS
Summary Introduction

To calculate: The value of ROE of firm A and firm B and to prove why firm A‘s ROE is higher in case of their ROE being similar.

Introduction: The ROE is a financial tool to measure the possibility of profit for the firm. It measures the firm investment efficiency whereas the ROA measures the same possibility but in terms of the assets of the firm.

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