Mehal Mechanics Ltd's leverage ratio moved from 15.3% to 9% between 2005 and 2007. No common or preferred shares were issued in the year. Which of the following situations is most likely to achieve this result?
A) Higher net income and a decrease in the dividend payout ratio
B) Higher net income and increase in the dividend payout ratio
C) Lower return on capital employed and a higher debt to equity ratio
D) Higher return on capital employed and a higher debt to equity ratio
E) Higher net income regardless of dividend payout ratio
Correct Answer:
Verified
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