This year Andrews achieved an ROE of 12.9%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE?Select: 1

Andrews ROE will increase.

Andrews ROE will decrease.

Andrews ROE will remain the same.