Question:Assume that the debt-equity ratio of XYZ Company is .5 to 1. If the company issued a long-term note in the purchase of some land, what effect would this transaction have on the debt-equity ratio? 

A It would decrease the debt-equity ratio. 
B It would increase the debt-equity ratio. 
C It would have no effect on the debt-equity ratio. 
D The answer cannot be determined from the information given. 

+ Answer
A 

+ Explanation
Answer not sure

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Md. Habib Ullah

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