If a Company's Return on Assets Is Substantially Lower Than

question 55

True/False

If a company's return on assets is substantially lower than its cost of borrowing, then the common stockholders would normally want the company to have a relatively high debt/equity ratio.

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Definitions:

Distribution

The process by which goods or services are delivered from the producer or supplier to the end-user.

Opportunistic Infections

Infections that occur more frequently or are more severe in individuals with weakened immune systems, such as those with HIV.

Diagnosed

The identification of the nature of an illness or other problem by examination of the symptoms.

AIDS

Acquired Immune Deficiency Syndrome, a life-threatening condition caused by the human immunodeficiency virus (HIV), leading to a severe weakening of the immune system.