Which of the following could NOT explain an increase in the return on equity ratio?
A) Share buyback
B) Declaring a final dividend
C) Increase in profits
D) Purchase of land on credit

Question

Quizplus · Accepted Answer

The purchase of land on credit would increase the assets of the company, but would also increase the liabilities, thereby offsetting any potential increase in the return on equity ratio. A, B, and C could all potentially lead to an increase in the return on equity ratio.

Which of the Following Could NOT Explain an Increase in the Return