To increase her return on equity,Latitia could:
A)increase the amount of assets he company owns.
B)increase the amount of debt on her balance sheet.
C)decrease the amount of liabilities on her balance sheet.
D)decrease the amount of inventory she carries.

Question

Quizplus · Accepted Answer

Increasing the amount of debt on the balance sheet can increase return on equity because it leverages the equity, potentially increasing returns if the borrowed funds generate a higher return than the cost of the debt.

To Increase Her Return on Equity,Latitia Could