A Company Has a Debt to Assets Ratio of

question 36

Multiple Choice

A company has a debt to assets ratio of .45 and a return on equity ratio of 10%.If the company then issues common stock,which of the following is a true 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.

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Definitions:

Quality-Oriented Incentives

Rewards or bonuses given to employees for meeting or exceeding quality standards in their work.

Team Awards

Recognitions or rewards given to a group of employees for their collective performance, achievements, or contributions toward organizational goals.

Group Incentive

A reward system where a team of employees is financially compensated based on the achievement of certain predefined targets or goals.

Employee Stock Ownership Plan

A program that grants employees ownership interest in the company, typically through the allocation of stock.