Which of the Following Statements Is Most Correct

question 77

Multiple Choice

Which of the following statements is most correct?

• A) If two firms have the same ROE and the same level of risk, they must also have the same EVA.
• B) If a firm has positive EVA, this implies that its ROE exceeds its cost of equity.
• C) If a firm has positive ROE, this implies that its EVA is also positive.
• D) Statements b and c are correct.
• E) All of the statements above are correct.

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Definitions:

Decade

A span lasting a decade.

Roosevelt Administration

The period of U.S. governance under President Franklin D. Roosevelt from 1933 to 1945, known for the New Deal programs.

Federal Reserve Board

The governing body of the Federal Reserve System, overseeing the U.S. central banking system and responsible for regulating the nation's monetary policy.

Recession 1937-38

A sharp economic downturn that occurred during the late 1930s in the United States, part of the larger Great Depression era, marked by high unemployment and deflation.