Casey Communications Recently Issued New Common Stock and Used the Proceeds

question 105

Multiple Choice

Casey Communications recently issued new common stock and used the proceeds to pay off some of its short-term notes payable.This action had no effect on the company's total assets or operating income.What would occur as a result of this action?

• A)The company's current ratio would increase.
• B)The company's times-interest-earned ratio would decrease.
• C)The company's basic earning power ratio would increase.
• D)The company's equity multiplier would increase.

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Definitions:

Stability

The resistance of a chemical substance or compound to undergoing a change in its structure, properties, or composition over time or under certain conditions.

Kinetic Energy

The energy possessed by an object due to its motion, calculable as one-half the mass times the square of its velocity.

Electron Clouds

The region around an atomic nucleus where electrons are likely to be found, representing the electron’s probable location based on quantum mechanics.

Tertiary Hydrogens

Hydrogen atoms attached to a tertiary carbon, which is a carbon atom bonded to three other carbon atoms.