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Ware Company Has a Return on Assets of 15% and a Return

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Essay

Ware Company has a return on assets of 15% and a return on common stockholders' equity of 10%.John Ware,the president of the company,has asked you to explain the reason for this difference.What causes the difference? How is the concept of financial leverage involved?


Definitions:

Product-Development Team

A group of individuals working together to conceive, design, and bring a new product to market, encompassing various roles such as research, design, engineering, and marketing.

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