When Will ROE Equal ROC

question 65

Multiple Choice

When will ROE equal ROC?

• A) Whenever the firm has equal debt and equity financing
• B) Whenever the firm has no debt
• C) Whenever the value of the firm's assets exceeds the value of its equity
• D) ROE will never equal ROC

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Definitions:

Journalize

The process of recording business transactions in the journal as part of the accounting cycle.

Transactions

Financial events that result in changes to the financial position of a company, such as sales, purchases, and payments.

Equipment

Long-term assets that are used in the production of goods and services; these are tangible in nature.

Accounts Receivable

Obligations of customers to pay a company for goods or services that have been dispensed but remain unpaid.