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3. (Dividends and share repurchases: Basics) All other things being equal, the payment of an internally financed cash dividen

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Answer #1
Answer : (a) a lower current ratio
Explanation : Formula for current ratio = Current assets / Current liabilities
When an internally financed cash dividend is paid, the current assets will decrease and there will be no change in the current liabilities due to this transaction.
As in the current ratio, the current assets are in the numerator, decrease in current assets will result in lower current ratio.
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