Which of the Following Is a Common Effect When Return

question 87

Multiple Choice

Which of the following is a common effect when return on common stockholders' equity is greater than return on total assets?

• A)Financial leverage is being used effectively.
• B)The company has no debt.
• C)The company's profit is declining.
• D)Earnings per share will be extremely large.

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Definitions:

Flow

In electrical contexts, flow refers to the movement or circulation of electric current through a conductor or circuit.

Semiconductor

A material that contains four valence electrons and is used in the production of solid-state devices.

Valence Electrons

The electrons in an atom's outer shell, which determine the chemical properties of the element and its reactivity.

Producing Electricity

The process of generating electric power from other forms of energy, such as mechanical energy or chemical energy.