Question
Which of the following is a criticism of a policy of maximizing the firms return on equity (ROE)? ROE is based on after-tax earnings, not
Which of the following is a criticism of a policy of maximizing the firms return on equity (ROE)?
ROE is based on after-tax earnings, not cash flows.
ROE does not consider risk.
ROE ignores the size of the initial investment as well as future cash flows.
All of these are criticisms of ROE as a goal.
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Global Banking
Authors: Roy C Smith, Ingo Walter, Gayle DeLong
3rd Edition
0195335937, 9780195335934
