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Ratios: Return on Equity (ROE)
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Ratios: Return on Equity (ROE)
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14. Financial Statement Analysis / Ratios: Return on Equity (ROE) / Problem 1
Problem 1
What is the relationship between leverage and ROE?
A
Leverage guarantees a stable ROE.
B
Leverage can amplify ROE, leading to higher returns but also higher risk.
C
Leverage always decreases ROE.
D
Leverage has no impact on ROE.
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