Multiple Choice
A company has a debt-to-assets ratio of 0.45 and a return on equity ratio of 10%.If the company then issues additional shares of common stock for cash,which of the following is a correct 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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