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Question 9 Company A has the same leverage and profitability as Company B. However, Company A has a higher return on equity. Why is this?

Question 9

Company A has the same leverage and profitability as Company B. However, Company A has a higher return on equity. Why is this?

Select an answer:

  • Company B generates less profit per $100 of sales than Company A.

  • Company B uses less equity to buy assets than Company A.

  • Company A has more income than Company B.

  • Company A generates more sales with its assets than Company B.

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