The debt to assets ratio is a leverage ratio. What is its significance?
A) The higher the ratio, the higher the degree of leverage, and the higher the financial risk.
B) The lower the ratio, the lower the degree of leverage, and the higher the financial risk.
C) The higher the ratio, the lower the degree of leverage, and the higher the financial risk.
D) The lower the ratio, the higher the degree of leverage, and the lower the financial risk.
2. Popular Co. wants to decrease the market price of their common shares. Which action(s) would they take to accomplish this?
A) Issue stock dividends
B) Enact a stock split
C) Enact a reverse stock split
D) Both A and B
E) Both A and C