When will ROE = ROC?
A) If the firm has equal debt and equity financing
B) If the firm has no interest payments on debt
C) If the value of the firm's assets exceed the value of its equity
D) ROE will never equal ROC

Question

Quizplus · Accepted Answer

ROE equals ROC when there are no interest payments on debt, as both metrics would then reflect the same return on the firm's capital without the impact of interest expenses.

When Will ROE = ROC