ROE is “accounting profit” / equity. Still D.
Maybe I am confusing myself. So where does the accounting profit consider the cost of capital, other than the cost of debt?
in that interest is deducted from operating profit.
chrismaths Wrote: ------------------------------------------------------- > ROE is “accounting profit” / equity. > > Still D. Right… I had myself confused about my own question! ROE is a percentage expression of accounting profit (so is net profit margin), making D the least accurate statement.
I still say C for the first question - plyon did you write to schweser about this?? D for the second one…economic profits is always in dollar terms…otherwise the two wouldn’t be compared…