Use the Following Information to Answer the Question(s)below

question 40

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil has assets with a market value of $600 million,$70 million of which are cash.It has debt of $250 million,and 20 million shares outstanding.Assume perfect capital markets.
-If Wyatt Oil distributes the $70 million as a dividend,then its debt-to-equity ratio after the dividend will be closest to:

• A)0.7.
• B)0.9.
• C)1.0.
• D)1.1.

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Definitions:

Fixed-Alternative

A choice structure in a decision-making process where the options available are limited and defined.

Response Options

The various ways an individual or organization can reply or react to a piece of communication, survey, or situation.

Attitudinal

Relating to, based on, or expressing an attitude or opinion, often in the context of consumer attitudes towards products or brands.