A Company Has a Debt-To-Assets Ratio of 0

question 8

Multiple Choice

A company has a debt-to-assets ratio of 0.45 and a return on equity ratio of 10%.If the company then issues additional shares of common stock for cash,which of the following is a correct statement?

• A)The debt-to-assets ratio will decrease and the return on equity ratio will decrease.
• B)The debt-to-assets ratio will increase and the return on equity ratio will increase.
• C)The debt-to-assets ratio will not change and the return on equity ratio will not change.
• D)The debt-to-assets ratio will decrease and the return on equity ratio will increase.

---

Definitions:

Manufacturing Processes

The methods and steps involved in converting raw materials into finished products, often through the use of machinery, labor, and chemical processing.

Internet

A global network of computers that allows for the exchange of information and communication across vast distances.

CEO Activism

CEOs and company leaders taking public positions on political and social issues on a local, national or global basis.

Racial Tensions

Strain and conflict in relationships between different ethnic groups within a society, often stemming from social, economic, and political inequalities.