The relationship between the market rate of a bond and the r

The relationship between the market rate of a bond and the rate of return on the borrowed funds affect the company\'s return on equity.

True or False

Solution

True , The relationship between the market rate of a bond and the rate of return on the borrowed funds affect the company\'s return on equity.

=> This is because higher the rate of return on the borrowed funds, the higher the company\'s return on equity, otherwise vise-versa.