Question
Company S earns 15% on its assets and has no debt outstanding at the present which means that the return on their equity is also
Company S earns 15% on its assets and has no debt outstanding at the present which means that the return on their equity is also 15%. If company S were to borrow money at a cost of 10% the return on the firms equity should:
| Increase |
| Decrease |
| Not Change |
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Practical Financial Management
Authors: William R. Lasher
6th Edition
1439080496, 978-1439080498
