If a company has a return on equity that is lower than its cost of equity capital, it could be said to be destroying value.

Question

Quizplus · Accepted Answer

If a company has a return on equity that is lower than its cost of equity capital, it means the company is not generating enough return for its shareholders to justify the level of risk. This can lead to a decline in the stock price and a loss of shareholder value.

If a Company Has a Return on Equity That Is