A Firm Wishes to Keep the Present Debt/equity Ratio

question 15

Multiple Choice

A firm wishes to keep the present debt/equity ratio. It has earnings of $10,000; pays a dividend of $6,000 and has investment of $8,000. It must

• A) borrow $4,000.
• B) sell $6,000 of common stock.
• C) issue $4,000 of common stock.
• D) repurchase $6,000 of common stock.

---

Definitions:

USA PATRIOT Act

Legislation passed in response to the September 11, 2001, terrorist attacks aiming to strengthen U.S. counterterrorism efforts by enhancing law enforcement investigatory tools.

Poorly Understood

Describes a concept, situation, or phenomenon that is not well comprehended or grasped.

Law Enforcement

The system or organizations involved in preventing crime, maintaining public order, and ensuring justice, including police, detectives, and agencies.