If a Firm's Return on Investment (I

Multiple Choice

If a firm's return on investment (i.e., earnings after taxes divided by total assets) is 7% and the firm has no preferred stock financing, it is ____.

A) possible that its return on stockholders' equity is 10%
B) possible that its return on stockholders' equity is 5%
C) impossible for its debt-to-equity ratio to be 1.0
D) impossible for its net profit margin to be 7%