Last Year's Return on Equity Was 30

question 3

Multiple Choice

Last year's return on equity was 30%.This year the ROE has decreased to 20% even though the firm's earnings equaled last year's earnings.The firm has no preferred stock.What caused the decrease?

• A) Equity decreased by 10%.
• B) Equity decreased by 50%.
• C) Equity increased by 10%.
• D) Equity increased by 50%.

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Definitions:

Learning Process

The acquisition of knowledge or skills through study, experience, or teaching, which leads to a change in behavior or understanding.

Conditioned Taste Aversions

Conditioned taste aversions occur when an organism associates the taste of a certain food or substance with an unpleasant or sickening experience, leading to subsequent avoidance of that food.

Novel Taste

A new or unfamiliar flavor experienced when trying different foods or beverages.

Nausea

A sensation of unease and discomfort in the stomach with an urge to vomit.