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

---

Definitions:

Graph

A visual outline that maps the structure of relationships or interconnections among a number of things using specific signs like dots, lines, and bars.

Horizontal Asymptote

A horizontal line that a graph approaches but never reaches as the independent variable approaches infinity or negative infinity.

\(4^{x+2}\)

An exponential expression indicating that four is raised to the power of x + 2, where x is a variable.

Graph

A graph is a visual representation of data, functions, or equations on a coordinate plane, typically using points and lines to show relationships between variables.