INTERPRETING THE RATE OF RETURN ON COMMON SHARE- HOLDERS' EQUITY AND ITS COMPONENTS. Selected financial data for Georgia-Pacific Corporation, a forest products and paper firm, appear in Exhibit 4.27.
Required:
a. In which years did financial leverage work to the advantage of the common share-holders? In which years did it work to their disadvantage? Explain.
b. Identify possible reasons for the changes in the capital structure leverage ratio during the five-year period.
Text Book: Financial Reporting, Financial Statement Analysis and Valuation: A Strategic Perspective By James Wahlen, Stephen Baginski, Mark Bradshaw.