MGT 416 This year Andrews achieved an ROE of 4.8%
June 7th, 2024
This year Andrews achieved an ROE of 4.8%. Suppose the Board of Directors of Andrews mandates that management take measures to decrease financial Leverage (Assets/Equity) next year. Assuming Sales, Profits, and Assets remain the same next year, what effect would you expect this new Leverage policy will have on Andrews’s ROE?