March 2025 ACCA Exams

Comments & Instant poll >>

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for June 2025 exams.
Get your discount code >>

ROE

This topic has 1 reply, 2 voices, and was last updated 2 years ago by Stephen Widberg.

Viewing 2 posts - 1 through 2 (of 2 total)

Author
Posts
November 9, 2022 at 7:56 am #671108
phuongmore
Participant
- Topics: 132
- Replies: 128
Dear sir,
Why 1 company may have a higher ROE than another company simply because it finance the business through loan capital rather than equity capital?
Thanks
November 9, 2022 at 5:32 pm #671143
Stephen Widberg
Keymaster
- Topics: 15
- Replies: 3386
Depends on the numbers. You would get numbers in the exam.
If debt financed – lower profit (because of finance cost) and lower equity (less shares in issue).
All I can say.
🙂
Author
Posts

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.