Year Rosenberg Corp

question 62

Multiple Choice

year Rosenberg Corp.had $195,000 of assets, $18,775 of net income, and a debt-to-total-assets ratio of 32%.Now suppose the new CFO convinces the president to increase the debt ratio to 48%.Sales and total assets will not be affected, but interest expenses would increase.However, the CFO believes that better cost controls would be sufficient to offset the higher interest expense and thus keep net income unchanged.By how much would the change in the capital structure improve the ROE?

• A)4.36%
• B)4.57%
• C)4.80%
• D)5.04%
• E)5.30%

---

Definitions:

Apgar Scale

A quick, simple test used to diagnose the physical state of a newborn infant.

Neonatal Assessment

The evaluation of a newborn's physical status and overall health immediately following birth.

Antiseptic Surroundings

Environments that are clean, sterile, and designed to minimize the risk of infection or contamination.

Home Births

Childbirth that occurs at home rather than in a hospital or birthing center, often involving a midwife or other healthcare professional.