Grindle Ltd Has Total Assets of $1

Multiple Choice

Grindle Ltd has total assets of $1.5 million and liabilities of $0.9 million before it issues $300 000 in preference shares.What is the debt-to-asset ratio assuming that the preference shares have no voting rights and offer a fixed dividend rate of 10% and (a) are redeemable at the discretion of the issuer and (b) have a scheduled date for mandatory redemption?

A) (a) 60%; (b) 80%
B) (a) 50%; (b) 67%
C) (a) 80%; (b) 60%
D) (a) 67%; (b) 50%