Assume a company has a current ratio that is greater than 1. Which of the follow

Question

Assume a company has a current ratio that is greater than 1. Which of the following transactions will reduce the company's current ratio? A) Selling office equipment at book value. B) Paying a cash dividend already declared. C) Borrowing by taking out a short-term loan. D) Selling equipment at a loss. AND The market price of XYZ Company's common stock dropped from $25 to $21 per share. The dividend paid per share remained unchanged. The company's dividend payout ratio would: A) increase. B) decrease. C) be unchanged. D) impossible to determine without more information.

Explanation / Answer

A

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