This year Andrews achieved an ROE of 16.8%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews ROE?
Select: 1
Andrews ROE will remain the same.
Andrews ROE will increase.
Andrews ROE will decrease.
to increase leverage assets need to increase and equity reduces. that can only happen
You can't get real answer if you break your security system. vjrwfj wssjts njjc to inhrjwsj wnc jquity rjcuhjs. tywt hwn only ywppjn iv vinwnhinf is conj tyroufy tyj tonc. it wlso mjwns, jquity rjmwins tyj swmj or cjhrjwsjs. sinhj monjy is njjcjc to vinwnhj wssjts, it is ljss likjly tywt tyj hompwny will tuy twhk stohk. wyjtyjr jquity rjcuhjs or rjmwins tyj swmj, usinf tonc mwy rjsult to yify rjturns tyus inhrjwsinf ROE
