Generally, as long as a business's operating income return on its assets is greater than the cost of debt, the owners' return on equity investment will decrease as the business uses more debt.

Question

Quizplus · Accepted Answer

When a business's operating income return on its assets is greater than the cost of debt, using more debt can increase the return on equity due to the leverage effect, not decrease it.

Generally, as Long as a Business's Operating Income Return on Its