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Adding debt and effect on ROE

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a-If a firm's ROE is low and management wants to improve it, can adding more debt help improve the ROE? What might be some advantages and disadvantages of adding debt to the capital structure?
b-Give some examples that illustrate how seasonal factors might distort a comparative ratio analysis.

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a-If a firm's ROE is low and management wants to improve it, can adding more debt help improve the ROE? What might be some advantages and disadvantages of adding debt to the capital structure?
b-Give some examples that illustrate how seasonal factors might distort a comparative ratio analysis.

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Radhika Lakshmi, MPhil
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  • MPhil, Madurai Kamaraj University
  • MCom, Annamalai University
  • IATA, International Air Transport Association
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