A Company Has a Debt-To-Assets Ratio of 0

question 152

Multiple Choice

A company has a debt-to-assets ratio of 0.45.If the company then borrows cash from the bank to finance a building acquisition,which of the following is a correct statement?

• A)The debt-to-assets ratio will be unchanged.
• B)The debt-to-assets ratio will increase.
• C)The debt-to-assets ratio will decrease.
• D)The debt-to-assets ratio will increase as a result of the cash received and then decrease as a result of the building acquisition.

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