a. Why is the rate earned on stockholders equity by a thriving business ordinarily higher than the

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a. Why is the rate earned on stockholders’ equity by a thriving business ordinarily higher than the rate earned on total assets?

b. Should the rate earned on common stockholders’ equity normally be higher or lower than the rate earned on total stockholders’ equity? Briefly explain.

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Financial and Managerial Accounting

ISBN: 978-0538480895

11th Edition

Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren

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Question Posted: Oct 14, 2011 05:30 AM

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a. Why is the rate earned on stockholders equity by a thriving business ordinarily higher than the

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a Due to leverage the rate on stockholders equity will often ...View the full answer

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