The issuance of stock options will have a positive effect on a company's debt-to-equity ratio over time.

Question

Quizplus · Accepted Answer

Issuing stock options does not immediately affect a company's debt-to-equity ratio because options are not considered debt and do not directly change the equity amount until they are exercised. When exercised, they can increase equity, potentially improving the debt-to-equity ratio, but the initial issuance itself does not have a direct impact.

The Issuance of Stock Options Will Have a Positive Effect