Q. This year Andrews achieved an ROE of 2.0%. Suppose the Board of Directors of Andrews mandates that management take measures to increase financial Leverage (=Assets/Equity) next year. Assuming Sales, Profits and Assets remain the same next year, illustrate what effect would you expect this new Leverage policy will have on Andrews ROE?

Q. The Montana Supreme Court decides the case of National Co. v. Overseas Corp. Of nine justices, six believe the judgment should be in National's favour. Justice Peel, one of the six, writes a separate opinion. Three justices who believe the judgment should be in overseas favour join in a third separate opinion.