Which of the following transactions or events would have no immediate effect on the times interest earned ratio but will cause debt to equity ratio to decrease?
A)Issuing new debt
B)Issuing new equity
C)Having a stock split
D)Recording large contingent liability for lawsuit

Question

Quizplus · Accepted Answer

Issuing new equity would increase the equity portion of the debt to equity ratio, causing it to decrease. However, it would have no immediate effect on the times interest earned ratio as it does not involve interest expenses or income.

Which of the Following Transactions or Events Would Have No