KMS corporation has assets of $400 million, $40 million of which are cash. It has debt of $100 million. If KMS repurchases $13.3 million of its stock: a. What changes will occur on its balance sheet? b. What will be its new leverage ratio? a. What changes will occur on its balance sheet? (Select the best choice below.) O
A. Both the cash balance and shareholder equity will increase by $13.3 million OB. Both accounts receivable and shareholder equity will drop by $13.3 million. OC. Both the cash balance and shareholder equity will drop by $13.3 million. OD. Debt will increase by $13,3 million and shareholder equity will decrease by $13.3 million b. What will be its new leverage ratio? The new leverage ratio after the repurchase is % (Round to one decimal place.) Get Finance homework help today
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