When Is the Return on Assets Equal to the Return

question 29

Multiple Choice

When is the return on assets equal to the return on equity?

• A) When the current ratio of the firm equals 1.
• B) When the firm issues equal amounts of long term debt and common stock.
• C) When the firm issues no dividends for a given time period.
• D) When the firm only issues equity to finance its borrowing.

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Definitions:

Sobriety

The condition of being free from alcohol or drug intoxication, and often refers to the lifestyle of a person who maintains this state.

Diaphoretic

Pertaining to or characterized by profuse sweating, often as a symptom of an underlying medical condition or physical exertion.

One-On-One Supervision

Direct, personal oversight provided by an individual to a specific person, especially in contexts of care or education.

Check Patient

A healthcare procedure involving the assessment and monitoring of a patient's condition to ensure their well-being and to identify any need for treatment adjustments.