Answer (B) is correct . A company with a higher dividend payout ratio is distributing more of its earnings as dividends to common shareholders. It will have less cash and fewer total assets than a comparable firm with a lower payout ratio. The debt to assets ratio will be higher because total assets are lower, and the current ratio will be lower because cash has decreased.
Answer (A) is incorrect because The current ratio will be lower.
Answer (C) is incorrect because The debt to assets ratio will be higher, and the current ratio will be lower.
Answer (D) is incorrect because The debt to assets ratio will be higher.
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