Emerald Company Issued Additional Shares of Stock

question 68

Multiple Choice

Emerald Company issued additional shares of stock. Which of the following is true with regard to the effect of the stock issuance transaction on Emerald's ratio computations?

• A) Earnings per share decreases
• B) The debt to equity ratio increases
• C) The asset turnover ratio increases
• D) Return on equity remained unchanged

---

Definitions:

Cerebellum

is a part of the brain located at the back of the skull, crucial for motor control, posture, and balance.

Frontal Lobes

The part of the brain located behind the forehead that is responsible for problem solving, judgment, and motor function.

Adjacent

Nearby or next to, often in relation to physical proximity but also can mean in relation to concepts or points in a sequence.

Pressure

The application of force upon the surface of objects or substances, or the feeling of stress or urgency caused by demanding circumstances.