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What Would Happen to the Debt-To-Assets Ratio,if at the End

Question 111

Multiple Choice

What would happen to the debt-to-assets ratio,if at the end of 2015,the company borrowed $1,000 from the bank by signing a promissory note and received $2,000 from the issuance of stock?


A) This transaction would cause the debt-to-assets ratio to increase.
B) This ratio would increase indicating a less risky financing strategy.
C) The debt-to-assets ratio would not change.
D) This ratio would decrease because assets would increase by more than liabilities.

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