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11. More on ratio analysis Analysts and investors often use return on equity (ROE) to compare profitability of a company withWestern Amalgamated Corp. As a result of targeting by unethical product liability attorneys, Western, a small manufacturer ofIf a firm takes steps that increase its expected future ROE, its stock price will increase. always will a manager likely choo

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Answer #1

Not necessarily, as Stock price is dependent on other factors as well

Project Y

As it has higher ROE

Compare with financial ratios with other firms in the industry, as it will tell how the firm is performing in comparison to industry

Being small, Western may lack resources. Jeopardize sales and profits

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