The Following Question Relates to PQR, Which Has the Following

question 15

Multiple Choice

The following question relates to PQR, which has the following ratios: return on assets, (ROA) 12 per cent; return on equity (ROE) 15 per cent; and current ratio (CR) of 1.8:1. A company declares and pays a final dividend. The effect of this transaction is to:

• A) decrease CR but not affect ROA and ROE.
• B) decrease CR but increase ROA and ROE.
• C) decrease CR, increase ROA and not affect ROE.
• D) have no effect.

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