For a given level of after-tax income, the lower the level of equity a company has, the higher the return on equity its shareholders will earn.

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This is because if a company has a lower level of equity, it means that it is relying less on its own funds and more on debt financing. As a result, the cost of equity for the company's shareholders is lower, which leads to a higher return on equity for them. However, it's important to note that too much debt financing can also increase the financial risk for the company and its shareholders.

For a Given Level of After-Tax Income, the Lower the Level