If a Firm Has an ROA of 5% and Desires

question 53

Multiple Choice

If a firm has an ROA of 5% and desires an ROE of 10%, what debt-to-equity ratio will accomplish this?

• A) 1.00
• B) 0.50
• C) 1.50
• D) 2.00

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Definitions:

Moraine

A mass of rocks and sediment carried down and deposited by a glacier, typically as ridges at its edges or extremity.

Valley

A low area between hills or mountains, often with a river or stream flowing through it.

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