The Two Components of Return on Equity Are Return on Assets

question 124

True/False

The two components of return on equity are return on assets and financial leverage.

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Definitions:

Investee Earnings

The portion of income attributable to an investor from its investment in an associated company.

Cash Dividends

Payments made by a corporation to its shareholders from the company's profits.

Equity Method

An accounting technique used to record investments in which the investor has significant influence over the investee but does not control it.