Comments on: What effect does declaration and payment of cash dividend have on total liabilities and debt to equity ratio? http://www.debt--relief--blog.com/debt-relief/what-effect-does-declaration-and-payment-of-cash-dividend-have-on-total-liabilities-and-debt-to-equity-ratio Blog topics covering all forms of debt relief Sun, 12 Feb 2012 05:52:41 +0000 http://wordpress.org/?v=2.7 hourly 1 By: capwest5a http://www.debt--relief--blog.com/debt-relief/what-effect-does-declaration-and-payment-of-cash-dividend-have-on-total-liabilities-and-debt-to-equity-ratio/comment-page-1#comment-828 capwest5a Mon, 30 Mar 2009 11:06:51 +0000 http://debt--relief--blog.com/debt-relief/what-effect-does-declaration-and-payment-of-cash-dividend-have-on-total-liabilities-and-debt-to-equity-ratio/#comment-828 <a href="">Jacob</a> I think it's answer A. The declaration of a cash dividend creates a liability, but then the payment of the dividend negates that liability. The payment of the dividend also reduces equity, so debt to equity ratio increases. Jacob

I think it’s answer A.

The declaration of a cash dividend creates a liability, but then the payment of the dividend negates that liability.

The payment of the dividend also reduces equity, so debt to equity ratio increases.

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