Question: (a) Why is the rate earned on stockholders equity by a thriving business ordinarily higher than the rate earned on total assets? (b) Should the

(a) Why is the rate earned on stockholders’ equity by a thriving business ordinarily higher than the rate earned on total assets?

(b) Should the rate earned on common stockholders’ equity normally be higher or lower than the rate earned on total stockholders’ equity? Explain.


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