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:

Correlated

Describes the relationship between two variables where changes in one variable are associated with changes in another.

Null Hypothesis

A hypothesis that suggests there is no statistical significance in a set of given observations, implying no effect or relationship.

Linear Relationship

A relationship between two variables where the change in one variable is directly proportional to the change in another variable.

Pearson Correlation

A statistical measure that calculates the strength and direction of a linear relationship between two quantitative variables.