A company has a debt to assets ratio

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A company has a debt to assets ratio of 0.45. If the company then borrows cash from the bank to finance a building acquisition, which of the following is a true statement?

The debt to assets ratio will be unchanged.

The debt to assets ratio will increase.

The debt to assets ratio will decrease.

The debt to assets ratio will increase as a result of the cash received and then decrease as a result of the building acquisition.

Reference no: EM13942388

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