Multiple Choice
Which of the following is a criticism of a policy of maximizing the firm's return on equity (ROE) ?
A) ROE is based on after-tax earnings, not cash flows.
B) ROE does not consider risk.
C) ROE ignores the size of the initial investment as well as future cash flows.
D) All of the above are criticisms of ROE as a goal.
Correct Answer:
Verified
Correct Answer:
Verified
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