Barrett Company Declared and Paid a Cash Dividend Totaling $500,000

question 60

Multiple Choice

Barrett Company declared and paid a cash dividend totaling $500,000 on its common stock. As a result of this transaction, the company's debt to assets ratio will:

• A)Increase.
• B)Decrease.
• C)Remain the same.
• D)Cannot be determineD.The transaction will decrease stockholders' equity (retained earnings) and decrease an asset (cash). The debt to asset ratio is total debt/total assets. The reduction in stockholders' equity does not affect the ratio, but the decrease in assets causes an increase in the ratio.

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Definitions:

Security

Denotes measures and protocols implemented to protect against theft, attack, or other threats to safety and stability.

Caudate Nucleus

A brain structure within the basal ganglia involved in various functions including learning, memory, and regulating voluntary movement.

Ventral Tegmental Area

A part of the brain involved in the reward circuitry and the release of dopamine, significant in motivation, pleasure, and addiction.

Dopamine

A neurotransmitter in the brain involved in regulating movement, emotion, cognition, motivation, and feelings of pleasure.