The Rate of Return on Common Shareholders' Equity

Multiple Choice

The rate of return on common shareholders' equity

A) will exceed the rate of return on assets whenever the rate of return on assets exceeds the after-tax cost of borrowing and any dividends required for preferred shareholders.
B) will not exceed the rate of return on assets whenever the rate of return on assets exceeds the after-tax cost of borrowing and any dividends required for preferred shareholders.
C) will always exceed the rate of return on assets.
D) will never exceed the rate of return on assets.
E) none of the above