Which of the following actions would necessarily result in a lower debt-equity ratio, all else equal?
A)The firm uses its excess cash to repurchase some of its shares of common stock.
B)Warrant owners exercise their warrants.
C)The firm pays a special dividend to its shareholders.
D)All of the above would lower the debt-equity ratio of the firm.

Question

Quizplus · Accepted Answer

When warrant owners exercise their warrants, the company issues new shares, increasing equity and thus lowering the debt-equity ratio.

Which of the Following Actions Would Necessarily Result in a Lower