Blumenthal Company declared and paid a cash dividend totaling $50,000 on its common stock.As a result of this transaction,the company's debt to assets ratio will:
A)Decrease.
B)Increase.
C)Remain the same.
D)Cannot be determined.

Question

Quizplus · Accepted Answer

Paying a cash dividend reduces the company's assets (cash) while liabilities remain unchanged, leading to an increase in the debt to assets ratio.

Blumenthal Company Declared and Paid a Cash Dividend Totaling $50,000