If a fiRm Acquires More Long-Term Debt While Also Issuing

Multiple Choice

If a firm acquires more long-term debt while also issuing additional shares of stock, then the:

A) Debt-equity ratio will increase.
B) Debt-equity ratio will decrease.
C) Debt equity ratio will remain constant.
D) Change in the debt-equity ratio cannot be determined from the information provided.
E) Net Income will increase.