If a Company's Return on Total Assets Is Higher Than

question 20

True/False

If a company's return on total assets is higher than its return on common stockholders' equity, a company is using financial leverage effectively.

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Definitions:

Social Control Theory

A theory of crime, proposed by Travis Hirschi, that posits that strong social bonds increase conformity and decrease deviance.

Travis Hirschi

A criminologist who developed the Social Control Theory, proposing that strong bonds to society encourage conforming behavior and reduce the likelihood of deviance.

Crime

A violation of a norm that has been codified into law.

Structural Functionalism

A sociological perspective that views society as a complex system whose parts work together to promote solidarity and stability, focusing on the functions of each part in maintaining the whole.