Crimson Company Declared and Paid $1,000,000 in Dividends to the Common

question 37

Multiple Choice

Crimson Company declared and paid $1,000,000 in dividends to the common stockholders.The effect of this transaction is that the

• A)earnings per share decreased.
• B)current ratio increased.
• C)debt-to-equity ratio increased.
• D)earnings per share increased.

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Definitions:

Appellate Courts

Courts that review and reconsider cases previously judged in lower courts to ensure the law was applied correctly.

Record of Case

A comprehensive document or set of documents that contains all the pleadings, evidence, and other relevant materials of a legal case.

Prejudicial Error

refers to a mistake in the procedure or ruling of a court trial that is likely to affect the trial's outcome, warranting a review or reversal of the decision.

Appeal

A process by which a higher court reviews the decision of a lower court.