Williams Plc Is Considering Paying an Ordinary Dividend of £2

Multiple Choice

Williams plc is considering paying an ordinary dividend of £2 million. At present, the company has £4.4 million in the bank. What effect will the dividend payment have on the following ratios?

A) The operating profit will decrease and the current ratio will decrease.
B) The operating profit will decrease and there will be no effect on the current ratio.
C) There will be no effect on the operating profit and the current ratio will decrease.
D) There will be no effect on the operating profit and no effect on the current ratio.