If the Interest Rate on Debt Is Higher Than the ROA

question 42

Multiple Choice

If the interest rate on debt is higher than the ROA, then by using debt a firm's ROE will ________.

• A) decrease
• B) increase
• C) not change
• D) change but in an indeterminable manner

Recognize the significance and utility of organization charts.

Understand the concept and benefits of departmentalization.

Describe the impact of organizational structure on decision making and flexibility.

Recognize the challenges associated with different organizational structures.

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Definitions:

Initiating Structure

Leadership behavior characterized by clearly defining roles, setting goals, and establishing well-defined patterns of organization and communication.

Leadership Behavior

The actions, decisions, and mannerisms exhibited by a leader, influencing how they guide, motivate, and manage teams.

Autocratic Leader

A person in charge who retains most of the authority.

Morally Right

Actions or behaviors that are considered justifiable and ethical according to societal or personal standards of conduct.