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BUSI_V 370 922 2025SS Quiz 7: Capital Structure and Dividend Policy
Single choice
The effect of financial leverage on ROE depends on:
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Step-by-Step Analysis
The question asks: The effect of financial leverage on ROE depends on:
Option provided: the firm's financing strategy.
Analyzing the statement: ROE = Net income / Shareholder equity. Financial leverage affects ROE through the use of debt. Whether ROE increases or decreases with leverage depends on how debt costs compare with the......Login to view full explanationLog in for full answers
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