Select the Incorrect Statement Regarding the Return on Equity (ROE)measure

question 9

Multiple Choice

Select the incorrect statement regarding the return on equity (ROE) measure.

• A)ROE is used to measure the profitability of the firm in relation to the amount invested by stockholders.
• B)A company's ROE is lower than its return on investment because ROE does not consider that part of the business that is financed by debt.
• C)ROE is affected by a company's use of leverage.
• D)ROE equals net income divided by total stockholders' equity.

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Definitions:

Sociality Corollary

The idea that individuals' identities and behaviors are significantly shaped by their interactions and relationships within social groups and communities.

Constructs

Psychological categories people use to make sense of the world, including various attributes, behaviors, and personality traits.

Commonality

The state or condition of sharing or having certain attitudes, interests, or features in common with others.

Adaptive Control

A process or mechanism that allows systems to adjust their functioning or behavior in response to changes in the environment or internal state.