Why should a healthy company's rate of return on stock holders' equity exceed its rate of return on total assets?© BrainMass Inc. brainmass.com June 3, 2020, 6:39 pm ad1c9bdddf
Return on stockholder's equity= Net Income/ Stockholders' equity and
Return on total assets= Net Income/ Total assets
The return on equity should be more than total assets because it indicates that the company is efficient. Of all the fundamental criteria that long-term investors consider, one ...
The solution discusses the concept of rate of return on stock holders' equity and rate of return on total assets.