A Firm That Has No Debt Will Have Its Return

question 103

True/False

A firm that has no debt will have its return on assets (ROA) equal to its return on equity (ROE).

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Definitions:

Constructively Received

Income considered received by the taxpayer once it is made available to them, not necessarily when actually in hand.

Income

Financial gains obtained regularly as a result of working or investing.

Imputed Interest Rules

IRS rules that assign a market-rate interest value to certain transactions where no interest or an unrealistic amount of interest is charged.

Personal Residence

A dwelling where an individual lives for the majority of the tax year, which can include a house, apartment, trailer, or boat.