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Imagine that you are evaluating the financial performance of two similar firms. Company A has a Return on Equity of 12%. Company B has a

Imagine that you are evaluating the financial performance of two similar firms. Company A has a Return on

Equity of 12%. Company B has a Return on Equity of 9%. On face value, Company A would seem to be

performing better. Without any other information, please explain under what conditions would Company B be

better than Company A as a firm who is performing better.

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