Casey Communications Recently Issued New Common Stock and Used the Proceeds

question 47

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 occurred 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 total debt to total capital ratio increased.

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Definitions:

Monomer Unit

A small molecule that can bind chemically to other monomers to form a polymer, serving as the basic building block of polymers.

Anionic Polymerization

A type of chain-growth polymerization where the active center of the polymer chain is a negative ion.

Methyl α-cyanoacrylate

A compound known commonly as super glue; used as an adhesive due to its rapid polymerization properties.

Isobutylene

A volatile, flammable hydrocarbon gas, C4H8, used as a monomer in the production of various copolymers and as a fuel additive.