A company can improve their ROE by changing their capital structure.

Question

Quizplus · Accepted Answer

By changing their capital structure, such as increasing debt and decreasing equity, a company can effectively increase their ROE (Return on Equity) as their equity portion becomes a larger proportion of the total capital, leading to higher returns on that equity. However, this comes with increased financial risks and may not always be the best strategy for the company.

A Company Can Improve Their ROE by Changing Their Capital