A Firm Has an ROE of -2%, a Debt/equity Ratio

question 64

Multiple Choice

A firm has an ROE of -2%, a debt/equity ratio of 1.0, a tax rate of 0%, and an interest rate on debt of 10%.The firm's ROA is

• A)2%.
• B)4%.
• C)6%.
• D)8%.
• E)None of the options

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Definitions:

Correlated Groups Design

A research design where the samples are related or matched in some manner, rather than being completely independent groups.

Control Series Design

An experimental design that involves comparing data from a series of observations before and after the implementation of some intervention or treatment.

Interrupted Time Series Design

A quasi-experimental design in which observations are made over time both before and after an intervention.

Quasi-experimental Design

An empirical study used to estimate the causal impact of an intervention, lacking random assignment.