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Tissues and Co has elected to issue preference shares to the value of $220 000. Prior to the share issue the company has assets of
Tissues and Co has elected to issue preference shares to the value of $220 000. Prior to the share issue the company has assets of $780 000, liabilities of $370 000 and equity recorded at $410 000. The terms of the share issue state that these shares are non-redeemable but a guaranteed cumulative dividend of 8% of share value is payable. Calculate the debt-to-asset ratio immediately before and after the share issue.
before47.4%; after 47.4%
before47.4%; after 37%
before52.6%; after 63%
before47.4%; after 59%
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