If ROE is less than r_e, the company can be characterized as a growth company.

Question

Quizplus · Accepted Answer

ROE (Return on Equity) being less than the cost of equity (r) does not necessarily characterize a company as a growth company. Growth companies are typically identified by their potential to increase revenue, profit, or market share at a faster rate than the average business in their industry, not directly by their ROE relative to their cost of equity.

If ROE Is Less Than Re, the Company Can Be

If ROE Is Less Than R_e, the Company Can Be