Multiple Choice
What will be the effect on Gamma's debt ratio if Gamma's owner invests an additional $5 million to finance its expansion?
A) The debt ratio will decrease from .1 (3/30) to .0857 (3/35) after the additional investment.
B) The debt ratio will decrease from 3/27 before to 3/32 after the additional investment.
C) The debt ratio will increase from 30 before to 35 after the additional investment.
D) Additional investment by owner will have no effect on the debt ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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