A debt/total asset ratio of 75% and a ROE of 12% means:
A) the owners of XYZ are financing 75% of the firm's assets in order to receive a 12% return on their personal investment in the company's stock.
B) 25% of assets are financed with owners' equity.
C) the firm can cover interest payments with $0.25 of every dollar left for profit.
D) 12% of the firm's profits are financed with equity.
Correct Answer:
Verified
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A) the
A) debt
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