genesisb7811 genesisb7811
  • 25-01-2020
  • Business
contestada

An increase in financial leverage generally results in a higher return on equity (ROE)
True or False?

Respuesta :

BenitoMarin BenitoMarin
  • 25-01-2020

Answer:

The statement is: True.

Explanation:

According to the DuPont analysis, three factors are influencing the increase of the Return On Equity (ROE): the efficiency of operations, the efficiency of the company's assets, and the financial leverage. The DuPont analysis studies those three factors and how they help the ROE to increase or decrease.

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