Question: Question 3 3.1 [35 Marks] Company A has a ROA of 9% and a ROE of 13%. Company B has a ROA of 8%

Question 3 3.1 [35 Marks] Company A has a ROA of 9%

Question 3 3.1 [35 Marks] Company A has a ROA of 9% and a ROE of 13%. Company B has a ROA of 8% and an ROE of 16%. What does this tell us about the relative levels of debt financing between these two companies? Which company's approach is better? (20)

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