If the Firm's Rate of Return on Its Assets Is

question 116

Multiple Choice

If the firm's rate of return on its assets is _____ than the cost of borrowing, then the owners' rate of return on equity will _____ as the firm uses _____ debt.

• A) less; decrease; less
• B) greater; decrease; more
• C) greater; increase; more
• D) less; increase; more

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Definitions:

Rambling

Speaking or writing at length in a confused or inconsequential way without clear direction or point.

Incongruent Responses

Responses that do not align or are inconsistent with the expected outcome or previous statements.

Satisfaction

A feeling of fulfillment or contentment regarding a particular outcome or experience.

Uncertainty

The state of being unsure or having doubts; the lack of certainty or predictability in outcomes.