Schweser Mock Exam 2 q83 - Return on Equity question, decrease, accounting, 2011, will

rohitdoshi

The question asks how chaning the accounting method of a SPE from equity method to consolidation method is going to affect the Return on Equity ratio.

I thought Return on Equity stays the same under equity method/consolidation/prop consolidation?!

The answers says the ratio will decrease as equity figure will increase.



Edited 1 time(s). Last edit at Monday, May 30, 2011 at 02:15PM by reg.