Afirm increases its debt ratio from 50% to 75%. which of the following statements is most correct: a. the firm probably has very low borrowingb. the firm’s positive roe will increasec. the stockholders’ leverage has decreased

The correct answer is (B)

Explanation:

Companies use different financing methods to fund their investment projects. Some companies use more debt and some offer their share. When a company increase its debt ratio it means that in future the company roe will increase, because equity shrinks. Return on equity of a company increase with respect to return on assets. Overall, more debt ratio will increase positive roe.

answer; i do believe that the correct answer is ; ///are valued more highly than their cost;