Which of the Following Would NOT Decrease the Return on Equity

question 6

Multiple Choice

Which of the following would NOT decrease the return on equity ratio?

• A) An increase in company income tax
• B) Declaring a dividend
• C) Increased cost of goods sold
• D) Issue of shares

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Definitions:

Marginal Tax Rates

The amount of tax paid on an additional dollar of income, which can vary by income level and type of taxpayer.

Federal Personal Income Tax

A tax levied by the federal government on the annual income of individuals, with rates varying based on income levels.

Average Tax Rates

The ratio of total taxes paid to total income, expressing the fraction of income that is paid in taxes.

Taxable Income

The portion of an individual's or corporation's income that is subject to taxation according to federal or state law.