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If a company significantly increases its use of debt to buy assets while holding its net profit margin and total asset turnover constant (As shown
If a company significantly increases its use of debt to buy assets while holding its net profit margin and total asset turnover constant (As shown by the return on assets), what will happen to the company's return on equity?
- It will equal the company's use of equity.
- It will increase.
- It will decrease.
- It will remain unchanged
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