Asked by
Boris Borisow
on Nov 08, 2024
Verified
If a firm acquires more long-term debt while also issuing additional shares of stock, then the:
A) Debt-equity ratio will increase.
B) Debt-equity ratio will decrease.
C) Debt equity ratio will remain constant.
D) Change in the debt-equity ratio cannot be determined from the information provided.
E) Net Income will increase.
Long-Term Debt
Refers to loans or other forms of financial obligation that are due for repayment more than one year into the future.
Shares of Stock
Shares of stock represent units of ownership in a company or financial asset, providing the shareholder with a proportionate part of the company's profits and assets.
- Gain insight into the implications of financing decisions for financial leverage and solvency.
Verified Answer
TS
Learning Objectives
- Gain insight into the implications of financing decisions for financial leverage and solvency.