Asked by genevieve yaldoo on Jun 14, 2024
Verified
Which of the following correctly describes the effect of Mogul Company declaring and distributing a 10% common stock dividend?
A) Mogul's current ratio decreased.
B) Mogul's return on equity ratio decreased.
C) Mogul's debt-to-equity ratio remained the same.
D) Mogul's return on assets decreased.
Debt-To-Equity Ratio
A ratio demonstrating the balance between shareholder equity and debt in funding a company's assets.
Return On Equity
A measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses its equity investment.
- Assess the impact of financial activities and corporate decisions on various fiscal ratios.
Verified Answer
SA
Sasha AlexanderJun 17, 2024
Final Answer :
C
Explanation :
Declaring and distributing a common stock dividend does not affect the company's debt-to-equity ratio since it does not involve taking on any additional debt. The current ratio, return on equity ratio, and return on assets may be affected, but the question does not provide enough information to determine the specific impact.
Learning Objectives
- Assess the impact of financial activities and corporate decisions on various fiscal ratios.
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