A Firm Has an ROE of -2%, a Debt/equity Ratio

question 35

Multiple Choice

A firm has an ROE of -2%, a debt/equity ratio of 1.0, a tax rate of 0%, and an interest rate on debt of 10%.The firm's ROA is

• A)2%.
• B)4%.
• C)6%.
• D)8%.

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Definitions:

Empathy

The capacity to enter into and understand the emotions of others.

Critical Thought

The process of independently analyzing, synthesizing, and evaluating information as a guide to behavior and beliefs.

Sensationalized Depictions

Exaggerated or dramatic portrayals of events or situations, often in media, to attract attention.

Tolerance for Injustice

The degree to which an individual or society is willing to accept or endure unfairness or wrongdoing without demanding justice.