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Gates, Incorporated and Markham, Incorporated Each Had the Same Financial

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Gates, Incorporated and Markham, Incorporated each had the same financial position on January 1, Year 2. The following is a summary of each of their balance sheets on that date: Gates, Incorporated and Markham, Incorporated each had the same financial position on January 1, Year 2. The following is a summary of each of their balance sheets on that date:   Gates is about to raise $200,000 in cash by issuing bonds. Markham is going to raise $200,000 on the same day by issuing common stock. Immediately after these transactions, which of the following statements will be correct? A) Gates' current ratio will be higher than Markham's. B) Gates' current ratio will be lower than Markham's. C) Gates' debt to asset ratio will be higher than Markham's. D) Gates' debt to asset ratio will be lower than Markham's. Gates is about to raise $200,000 in cash by issuing bonds. Markham is going to raise $200,000 on the same day by issuing common stock. Immediately after these transactions, which of the following statements will be correct?


Definitions:

Concession Items

Products sold typically at entertainment venues, such as cinemas or sports arenas, often comprising snacks, drinks, and other quick-service foods.

Price Discriminate

A sales approach where the same goods or services are sold at varying prices to different buyers, depending on their readiness to spend.

Pure Monopolist

A single seller in a market that has no close substitutes, giving the seller complete control over the price and quantity of goods or services.

Profit-Maximizing

The act of adjusting production levels, prices, or other business operations to achieve the maximum profit.

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