Question
1. Explain in general terms the concept of return in investment. Why is this concept important in the analysis of financial performance ? 2. (a)Explain
1. Explain in general terms the concept of return in investment. Why is this concept important in the analysis of financial performance ?
2. (a)Explain how an increase in financial leverage can increase a company's ROE.
- (b) Given the potentially positive relation between financial leverage and ROE, Why don't we see companies with 100% financial leverage ( entirely nonowner financed)
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Financial Accounting
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
6th Edition
1618533118, 978-1618533111
