Use the Following Information to Answer the Question(s)below

question 40

Multiple Choice

Use the following information to answer the question(s) below.
Wyatt Oil has assets with a market value of $600 million,$70 million of which are cash.It has debt of $250 million,and 20 million shares outstanding.Assume perfect capital markets.
-If Wyatt Oil distributes the $70 million as a dividend,then its debt-to-equity ratio after the dividend will be closest to:

• A)0.7.
• B)0.9.
• C)1.0.
• D)1.1.

Comprehend the function and impact of bond ratings.

Grasp the concept and implications of call features in bonds.

Recognize the role and types of restrictive covenants in bond agreements.

Understand bond pricing mechanisms and the inverse relationship between market interest rates and bond prices.

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