1. Assume a company has a current ratio that is greater than 1. Which of the following transactions will reduce the company's current ratio?
A) Selling office equipment at book value.
B) Paying a cash dividend already declared.
C) Borrowing by taking out a short-term loan.
D) Selling equipment at a loss.
2. The market price of XYZ Company's common stock dropped from $25 to $21 per share. The dividend paid per share remained unchanged. The company's dividend payout ratio would:
A) increase.
B) decrease.
C) be unchanged.
D) impossible to determine without more information.