Which of the following could NOT explain an increase in the return on equity ratio?
A) share buyback
B) declaring a final dividend
C) increase in profits
D) a write down in the value of land that reverses a previous revaluation increment.

Question

Quizplus · Accepted Answer

A write down in the value of land would decrease the total assets of a company, which would in turn decrease the equity. This would result in a lower return on equity ratio, not an increase. Therefore, D could NOT explain an increase in the return on equity ratio.

Which of the Following Could NOT Explain an Increase in the Return