At the end of last year, Ace Company had total assets in the amount of $6,000,000 and total liabilities in the amount of $4,000,000. The company issued shares to new stockholders at the beginning of the current year for $1,000,000. As a direct result of this transaction, the:
A. debt-to-assets ratio will decrease.
B. debt-to-assets ratio will increase.
C. net profit margin ratio will decrease.
D. net profit margin ratio will increase.
Answer: A
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