1. Return on Equity (ROE) is an indicator of the accounting profitability that gets the shareholder ...
a. The higher, the better, since indebtedness does not affect risk.
b. Must be at least 3 times higher than the debt cost
c. A high ratio is a good indicator although the risk of financial indebtedness (leverage) should be analyzed, since a high ROE can also occur in a profitable company with very small equity and high leverage
d. A high ratio is a good indicator, although the risk of operating leverage and its effect on ROE should be also analyzed.
2. An IPP is:
a. A project of water distribution
b. A telecom project
c. A project of power generation
d. A project of real estate.