Your firm has total assets of $250 million and is financed with $100 million debt and $150 million equity. After paying a $50 million cash dividend, assets and stockholders’ equity decline by $50 million, but the firm’s debt obligation remains the same. Which of the following statements is true? Group of answer choices Debt financing has decreased from 40% to 50%. Debt financing has increased from 60% to 75%. Debt financing has increased from 20% to 80% Debt financing has increased from 40% to 50%.
Your firm has total assets of $250 million and is financed with $100 million debt and $150 million equity. After paying a $50 million cash dividend, assets and stockholders’ equity decline by $50 million, but the firm’s debt obligation remains the same. Which of the following statements is true? Group of answer choices Debt financing has decreased from 40% to 50%. Debt financing has increased from 60% to 75%. Debt financing has increased from 20% to 80% Debt financing has increased from 40% to 50%.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Your firm has total assets of $250 million and is financed with $100 million debt and $150 million equity. After paying a $50 million cash dividend, assets and
Group of answer choices
Debt financing has decreased from 40% to 50%.
Debt financing has increased from 60% to 75%.
Debt financing has increased from 20% to 80%
Debt financing has increased from 40% to 50%.
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