Crimson Company declared and paid $1,000,000 in dividends to the common stockholders.The effect of this transaction is that the
A)earnings per share decreased.
B)current ratio increased.
C)debt-to-equity ratio increased.
D)earnings per share increased.

Question

Quizplus · Accepted Answer

Paying dividends reduces equity, which increases the debt-to-equity ratio if debt remains constant.

Crimson Company Declared and Paid $1,000,000 in Dividends to the Common