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Using the Formula ROE = [NOI - RD] /Equity,the Term

Question 7

Multiple Choice

Using the formula ROE = [NOI - rD] /Equity,the term positive leverage implies that the return On equity is ________________ than the return on assets if the cost of debt "r" is ___________ than ROA where ROA = NOI/EQUITY.


A) greater,less
B) less,greater
C) minimal,maximized
D) a and b
E) a and c

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