Answer:
b. issuing new equity
Explanation:
debt to equity ratio = Total debt/ Total equity x 100
and
interest earned ratio = Operating Income ÷ Interest charge
Ways to decrease debt to equity ratio :
1. Increase equity (no effect on interest earned ratio)
2. Decrease debt (increases interest earned ratio)
thus,
issuing new equity have no immediate effect on the times interest earned ratio but will cause debt to equity ratio to decrease.
