Which One of the Following Changes Will Provide an Increase

question 55

Multiple Choice

Which one of the following changes will provide an increase (if only in the short-run) in a firm's ROE?

• A)a decrease in the profit margin.
• B)an increase in the dividend-payout ratio.
• C)an increase in equity.
• D)an increase in tax rates.

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Definitions:

Accord And Satisfaction

An arrangement between contracting parties whereby one of the parties substitutes a different performance for his or her original duty under the contract.

Novation

The act of replacing one obligation with another, effectively creating a new contract and releasing the original party from responsibility.

Assignment

The transfer of rights, property, or responsibilities from one party to another.

Delegation

The act of assigning responsibility or authority from one person or group to another person or group.