Multiple Choice
A company has a debt to assets ratio of .45 and a return on equity ratio of 10%.If the company then issues common stock,which of the following is a true statement?
A) The debt to assets ratio will decrease and the return on equity ratio will decrease.
B) The debt to assets ratio will increase and the return on equity ratio will increase.
C) The debt to assets ratio will not change and the return on equity ratio will not change.
D) The debt to assets ratio will decrease and the return on equity ratio will increase.
Correct Answer:
Verified
Correct Answer:
Verified
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