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Question 4 A firm\'s ROE will be equal to their ROA if the firm uses no equity f

ID: 2626940 • Letter: Q

Question

Question 4

A firm's ROE will be equal to their ROA if

the firm uses no equity financing

the firm uses only equity financing

a firm's ROE will never equal their ROE

a firm's ROE will always equal their ROE

4 points   

Question 5

Firms A, B and C all show a large increase in the cash account on their balance sheet from 2006 to 2007. Which firm would you prefer to invest in, assuming that you are a long-term investor?

Firm A which generated the cash by a large positive cash flow from operating activities.

Firm B which generated the cash by a large positive cash flow from investing activities

Firm C which generated the cash by a large positive cash flow from financing activities

4 points   

Question 6

Which of the following is a source of externally generated equity financing?

issuing new corporate bonds

issuing new shares of common stock

retained earnings

bank loans

collecting all of their outstanding accounts receivable

the firm uses no equity financing

the firm uses only equity financing

a firm's ROE will never equal their ROE

a firm's ROE will always equal their ROE

Explanation / Answer

A firm's ROE will be equal to their ROA if

a firm's ROE will always equal their ROE

Which of the following is a source of externally generated equity financing?

issuing new shares of common stock

Firms A, B and C all show a large increase in the cash account on their balance sheet from 2006 to 2007. Which firm would you prefer to invest in, assuming that you are a long-term investor?

Firm A which generated the cash by a large positive cash flow from operating activities

issuing new shares of common stock

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