Tissues and Co Has Elected to Issue Preference Shares to the Value

question 13

Multiple Choice

Tissues and Co has elected to issue preference shares to the value of $220,000.Prior to the share issue the company has assets of $780,000,liabilities of $370,000 and equity recorded at $410,000.The terms of the share issue state that these shares are non-redeemable but a guaranteed cumulative dividend of 8 per cent of share value is payable.Calculate the debt-to-asset ratio immediately before and after the share issue:

• A) Before - 47.4 per cent; after - 47.4 per cent
• B) Before - 47.4 per cent; after - 37 per cent
• C) Before - 52.6 per cent; after - 63 per cent
• D) Before - 52.6 per cent; after - 59 per cent
• E) Before - 47.4 per cent; after - 59 per cent

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Definitions:

Reflexes

Involuntary and almost instantaneous movements in response to stimuli.

Proprium

A term used in psychology to refer to the aspects of a person's self or identity that are considered central to their sense of self.

Infancy

The stage of human development that spans from birth to the age of two, characterized by rapid physical and cognitive growth.

Middle Age

A period of human adulthood that typically ranges from about 45 to 65 years of age, often characterized by increased self-awareness, stability, and responsibility.