Question: Firm A has a Return on Equity ( ROE ) equal to 2 0 % , while firm B has an ROE of 1 0

Firm A has a Return on Equity (ROE) equal to 20%, while firm B has an ROE of 10% during the same year. Both firms have a total debt ratio equal to 0.5. Firm A has an asset turnover ratio of 2, while firm B has an asset turnover ratio equal to 1. From this we know that
Firm A has a Return on Equity (ROE) equal to 20%,

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