Which one of the following will increase the return on equity?
A) increase in the corporate tax rate
B) decrease in fixed costs
C) issuance of debt to purchase equipment
D) increase in variable costs per unit
E) decrease in net sales

Question

Quizplus · Accepted Answer

Decreasing fixed costs will increase the return on equity as it will increase the net income, which in turn will increase the return on equity. The other options (A, C, D, and E) will decrease the return on equity.

Which One of the Following Will Increase the Return on Equity