Question: When will return on equity equal return on capital? Assume Total Capitalization = Book Value (equity). a)whenever the firm has equal debt and equity financing.

When will return on equity equal return on capital? Assume Total Capitalization = Book Value (equity).

a)whenever the firm has equal debt and equity financing. b)whenever the firm has no interest payments on debt.

c) whenever the value of the firm's assets exceeds the value of its equity. d) ROE will never equal ROC.

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