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Determine the effect of the following scenario on each of the following ratios: Debt to Equity Ratio Proft Margin Ratio Dividend Yield Ratio Deal ONLY

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Determine the effect of the following scenario on each of the following ratios: Debt to Equity Ratio Proft Margin Ratio Dividend Yield Ratio Deal ONLY with the facts provided in the scenario, and determine the direct effects of the scenario ONLY in the current period. Assume no effect on the market price of stock. Assume the Current Ratio prior to any scenario was 2:1 Debt to Equity Ratio - (Total Liabilities) / (Total Stockholders' Equity) Profit Margin Ratio = (Net Income) / (Net Sales) Dividend Yield Ratio - (Dividends per Share) / (Market Price per Share) Lengel's Dairy used supplies that it purchased in a prior period. The supplies are not considered to be inventory to the company. Multiple Choice The Debt to Equity Ratio will increase, the Profit Margin Ratio will increase, and no effect on the Dividend Yield Ratio O The Debt to Equity Ratio will decrease, the Profit Margin Ratio will decrease, and no effect on the Dividend Yield Ratio The Debt to Equity Ratio will increase, the Profit Margin Ratio will decrease, and no effect on the Dividend Yield Ratio The Debt to Equity Ratio will decrease, the Profit Margin Ratio will increase, and no effect on the Dividend Yield Ratio

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