Higher Debt Utilization Ratios Will Always Increase a Firm's Return

question 52

True/False

Higher debt utilization ratios will always increase a firm's return on equity given a positive return on assets.

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Definitions:

Risk Premium

The extra return or reward that investors demand for choosing a risky investment over a risk-free one.

Critical Care Surgeons

Highly specialized surgeons who are focused on the management and treatment of critically ill or injured patients, particularly those requiring comprehensive care and complex surgeries.

Highly Stressful Conditions

Circumstances or environments that significantly increase the level of stress experienced by individuals or organizations.

Uncertain Hours

Work hours that are not fixed or predictable, often varying from week to week.