Leverage ratio compared to the start of the year

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Reference no: EM131011696

A company has made a profit for the year. Which of the following company actions will have no effect on its Leverage Ratio compared to the start of the year?

a. It retains all its earnings and uses the money to purchase equipment

b. It issues (sells) new equity shares and uses the money to purchase equipment

c. It issues (sells) new equity shares and uses the money to pay off exactly that amount in bank loans

d. It pays out all the profit as dividend and issues (sells) a bond and uses the money to pay off exactly that amount in bank loans

Reference no: EM131011696

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