Question
If you are told that a business earns a 8% Rate of Return on Assets (ROA = 8%) and the Rate of Return on Equity
If you are told that a business earns a 8% Rate of Return on Assets (ROA = 8%) and the Rate of Return on Equity is 12% (ROE = 12%), what can you say about the average interest rate on the business's debt?
Group of answer choices
Interest rate is between 8% and 12%
Interest rate is greater than 12%
Not enough information is provided
Interest rate is less than 8%
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A Study In Public Finance
Authors: A. C. Pigou
1st Edition
1443722766, 978-1443722766
