TLCEnterprises Just Revised Its Capital Structure from a Debt-Equity Ratio

question 6

Multiple Choice

T.L.C.Enterprises just revised its capital structure from a debt-equity ratio of 0.30 to a debt-equity ratio of 0.45.The firm's shareholders who prefer the old capital structure should:

• A)sell some shares and hold the sale proceeds in cash.
• B)sell all of their shares and loan out the entire sale proceeds.
• C)do nothing.
• D)sell some shares and loan out the sale proceeds.
• E)borrow funds and purchase more shares.

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Definitions:

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