Why might operating losses increase after tax borrowing cost

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Question: 1. Return on total assets (ROA) is a common measure of profitability. The historical average is about 7.0 percent. The historical yield on corporate bonds is about 6.6 percent. Why is the ROA so low? Would not investors expect more than a 0.4 percent higher return on risky operations?

2. Why might operating losses increase after -tax borrowing cost?

Reference no: EM131491066

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