The Current Balance Sheet of Greyson Inc

question 127

Multiple Choice

The current balance sheet of Greyson Inc.reports total assets of $40 million, total liabilities of $4 million, and stockholders' equity of $36 million.Greyson is considering several financing possibilities in order to expand operations.What will be the effect on Greyson's debt to assets ratio if Greyson issues an additional $8 million in stock to finance its expansion?

• A)The debt to assets ratio will decrease from .1(4/40) to .083 (4/48) after the additional stock sale.
• B)The debt to assets ratio will decrease from 4/36 before to 4/44 after the additional stock sale.
• C)The debt to assets ratio will increase from 40 before to 48 after the additional investment.
• D)The additional stock issuance will have no effect on the debt to assets ratio.

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Definitions:

Big Meal

A substantial or sizeable meal that typically includes multiple courses or a large quantity of food, often consumed during special occasions or celebrations.

Serving Size

The standardized amount of food that helps inform nutritional content, often used in dietary guidelines and food labeling.

BMI

Body Mass Index, a measure used to classify individuals based on their body weight adjusted for their height, indicating whether they have a healthy weight, underweight, overweight, or obesity.

Obese

A medical condition characterized by excessive body fat that presents a risk to health, often defined as a Body Mass Index (BMI) of 30 or higher.