Holding All Other Variables Constant, Which of the Following Would

question 108

Multiple Choice

Holding all other variables constant, which of the following would increase return on equity? An increase in ____.

• A)the tax rate
• B)the equity ratio (equity/total assets)
• C)total assets
• D)total asset turnover

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Definitions:

Market Share

The portion of a market controlled by a particular company, often expressed as a percentage of total sales in that market.

Herfindahl Index

An indicator of how concentrated a market is, calculated by squaring the market shares of all firms in the market and adding these squared values together.

Four-Firm Concentration Ratio

A measure indicating the total market share held by the four largest firms within an industry, used as an indicator of market competitiveness.

Industry Sales

The total revenue generated by all companies within a specific sector or industry.