Question: If two firms generate the same return on assets, A. their asset base will be quite similar. B. None of these answers is correct. C.

If two firms generate the same return on assets,

A.

their asset base will be quite similar.
B.

None of these answers is correct.

C.

the firm with the higher liabilities will always have the higher ROE.
D.

the shareholders of both firms are realizing similar returns on their investment.

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