Mehal Mechanics Ltd's Leverage Ratio Moved from 15

question 12

Multiple Choice

Mehal Mechanics Ltd's leverage ratio moved from 15.3% to 9% between 2005 and 2007. No common or preferred shares were issued in the year. Which of the following situations is most likely to achieve this result?

• A) Higher net income and a decrease in the dividend payout ratio
• B) Higher net income and increase in the dividend payout ratio
• C) Lower return on capital employed and a higher debt to equity ratio
• D) Higher return on capital employed and a higher debt to equity ratio
• E) Higher net income regardless of dividend payout ratio

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Definitions:

Patch Clamp Technique

A method that allows researchers to study the ion channels of a tiny patch of membrane by tightly sealing a micropipette to the patch and measuring the flow of ions through the channels.

Ion Channel

Protein structures embedded in cell membranes that allow ions to pass in and out of the cell, crucial for various physiological processes.

Impulse Conduction

The process by which electrical signals are transmitted along a neuron, from the dendrites, through the axon, to the synapse.

Myelinated Axons

Axons covered with myelin sheaths which increase the speed at which nerve impulses can travel.