The Rate of Return on Common Shareholders' Equity

question 149

Multiple Choice

The rate of return on common shareholders' equity

• A)will exceed the rate of return on assets whenever the rate of return on assets exceeds the after-tax cost of borrowing and any dividends required for preferred shareholders.
• B)will not exceed the rate of return on assets whenever the rate of return on assets exceeds the after-tax cost of borrowing and any dividends required for preferred shareholders.
• C)will always exceed the rate of return on assets.
• D)will never exceed the rate of return on assets.
• E)none of the above