Select the Incorrect Statement Regarding the Return on Equity (ROE)measure

question 9

Multiple Choice

Select the incorrect statement regarding the return on equity (ROE) measure.

• A)ROE is used to measure the profitability of the firm in relation to the amount invested by stockholders.
• B)A company's ROE is lower than its return on investment because ROE does not consider that part of the business that is financed by debt.
• C)ROE is affected by a company's use of leverage.
• D)ROE equals net income divided by total stockholders' equity.

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Actions intended to mislead or trick others into believing something that is not true.

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Communication designed to convey unfavorable or disappointing information in a careful and considerate manner.

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