Question: Firm A ( with no financial leverage ) earns an ROI of 1 0 percent. Firm B also earns an ROI of 1 0 percent,

Firm A (with no financial leverage) earns an ROI of 10 percent. Firm B also earns an ROI of 10 percent, but its assets are partially financed by debt bearing an interest rate of 15 percent. Which of the following statements about the two firms are correct?
Multiple select question.
Firm B will have negative financial leverage.
Firm B's ROE will be less than Firm A's ROE.
Firms A and B are equally risky.

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