Casey Communications Recently Issued New Common Stock and Used the Proceeds

question 59

Multiple Choice

Casey Communications recently issued new common stock and used the proceeds to pay off some of its short-term notes payable. This action had no effect on the company's total assets or operating income. Which of the following effects would occur as a result of this action?

• A) The company's current ratio increased.
• B) The company's times interest earned ratio decreased.
• C) The company's basic earning power ratio increased.
• D) The company's equity multiplier increased.
• E) The company's debt ratio increased.

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Definitions:

Larynx

The voice box located in the neck, which houses the vocal cords and is involved in breathing, producing sound, and protecting the trachea against food aspiration.

Cartilages

A flexible, strong connective tissue found in various parts of the body such as joints, nose, and ears, providing support and cushioning.

Cyan

A greenish-blue color, one of the primary subtractive colors used in color printing and photography.

Septum

A partition separating two chambers, such as in the heart or nose, that is typically made of muscle or bone.