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13. We have two firms with the following financial metrics (Challenging Question); FIRMA FIRM B Total Debt / Total Assets 55% 40% ROA 8% 11%

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13. We have two firms with the following financial metrics (Challenging Question); FIRMA FIRM B Total Debt / Total Assets 55% 40% ROA 8% 11% Which firm has a greater ROE and by how much? (Hint: ROA = Net Income / Total Assets and ROE - Net Income / Total Equity) Firm A by less than 0.50% Firm Aby more than 1.00% O Firm B by less than 0.50% O Firm B by more than 1.00% O Both forms have the same ROE None of the above

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