Question: Q1) How does the level of leverage affecT ROE? Explain all the possible scenarios of the effect((in short)) Q2) (photo) Q3) What is the spread

Q1) How does the level of leverage affecT ROE? Explain all the possible scenarios of the effect((in short))

Q2) (photo)

Q3) What is the spread between the ROA and the intenal opportunity cest of capital? Use a mumerical example to support your answer.

Q1) How does the level of leverage affecT ROE? Explain all the

02) The following information for X Corporation for the years 2015 and 2018: ROE Tax Burden Interest Burden S. Margin A. Turnover Leverage Ratio 2015 11.00% 0.70 0.88 0.098 1.067 1.7143 2018 10.00% 0.70 0.9375 0.093 0.905 1.8095 ROE has decreased from 11% to 10% Explain in detail how ROA and Compound Leverage Factor contributed to this change? (15 Points)

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