All Other Things Being Equal, If a Company Issues a 1

question 60

Multiple Choice

All other things being equal, if a company issues a 1% stock dividend, what is the effect on the following ratios? $$\begin{array} { c c c c } & \text { Increase } & \text { Times interest earned } & \text { Financial leverage ratio } \\\text { A) }& \text { Increase } & \text { Increase } & \text { Increase } \\\text { B) } & \text { Increase } & \text { No effect } & \text { Increase } \\\text { C) } & \text { No effect } & \text { No effect } & \text { No effect } \\\text { D) }& \text { No effect } & \text { No effect }\end{array}$$

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Definitions:

Angular Rocks

Rocks with sharp edges and points, often resulting from the breaking and fracturing of harder rocks without significant weathering or rounding.

Bedrock

The solid rock layer beneath surface soils or sediments, forming the earth's crust's foundation.

Moved Downhill

The process of material, such as soil, rock, or snow, moving down a slope due to gravity, often accelerated by factors like water saturation or earthquakes.

High Percentage

Refers to a substantial or large proportion of a mix, group, or total.