Jessica Invested in QRT Stock When the Company Was Unlevered

question 22

Multiple Choice

Jessica invested in QRT stock when the company was unlevered. Since then, QRT has changed its capital structure and now has a debt-equity ratio of .36. To unlever her position, Jessica needs to:

• A) borrow some money and purchase additional shares of QRT stock.
• B) maintain her current equity position as the debt of the firm does not affect her personally.
• C) sell 36 percent of her shares of QRT stock and hold the proceeds in cash.
• D) sell 36 percent of her shares of QRT stock and loan out the sale proceeds.
• E) create a personal debt-equity ratio of .36.

---

Definitions:

Sensory Stimuli

External or internal factors that are detected by sensory receptors, leading to specific physiological or psychological responses.

Social Influences

How the presence or actions of others affect an individual's behavior, thoughts, and feelings.

Barn Owl

A species of owl known for its distinctive heart-shaped face and primarily nocturnal habits, often found in rural areas and open woodlands across various parts of the world.

Location

Refers to a specific place or position, often used in the context of geographic places or specifying the site of events or activities.