Question
Companies A and B have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt.
Companies A and B have the same total assets, sales, operating costs, and tax rates, and they pay the same interest rate on their debt. However, company A has a higher debt ratio. Which of the following statements is INCORRECT?
a. Given this information, Company B must have the higher ROE
. b. Given this information, Company A must have the higher ROE.
c. Both companies have the same BEP ratio.
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The International Handbook Of Public Financial Management
Authors: Richard Allen, Richard Hemming, B. Potter
1st Edition
1137574895, 978-1137574893
