There Are Three Variations of the Multidivisional Structure

question 77

True/False

There are three variations of the multidivisional structure.

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Definitions:

Equity Multiplier

The equity multiplier is a financial leverage ratio that measures the proportion of a company's total assets financed by shareholders' equity, used to evaluate financial risk.

New Equity

Refers to capital that a company raises by issuing new shares of stock, thereby giving investors ownership interests.

Additional Profits

Additional profits refer to the surplus income generated beyond the expected or normal income levels due to various factors, such as increased sales or reduced costs.

ROE

Return on Equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.