Assuming that a firms return on assets exceeds its interest costs, why would it not boost ROE

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Assuming that a firm’s return on assets exceeds its interest costs, why would it not boost ROE to the maximum through the use of debt financing since higher ROE leads to higher EPS?

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Investments Analysis and Management

ISBN: 978-1118363294

12th edition

Authors: Charles P. Jones

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Question Posted: Dec 15, 2015 06:20 AM

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Assuming that a firms return on assets exceeds its interest costs, why would it not boost ROE

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Although higher ROE leads to higher EPS two factors determine stock ...View the full answer

Investments Analysis and Management

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