When Will ROE = ROC

question 24

Multiple Choice

When will ROE = ROC?

• A) If the firm has equal debt and equity financing
• B) If the firm has no interest payments on debt
• C) If the value of the firm's assets exceed the value of its equity
• D) ROE will never equal ROC

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Definitions:

Subsidiary Inventory Ledger

The subsidiary ledger containing individual accounts for items of inventory.

Safeguarding Inventory

Measures and controls implemented by a company to protect its inventory from theft, damage, and mismanagement.

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Physical Inventory

The process of counting and verifying the actual quantities of physical merchandise or assets present in a store or warehouse.