A company can improve (lower) its debt-to-total assets ratio by doing which of the following?

Selling the common stock is the right answer in the situation

Borrowing more will increase Debt as a result increases debt-equity ratio. So, option1 is wrong.

Short and long term debts, both are included in calculation of debt-equity ratio. Hence, shifting in debt nature will not have any effect on ratio. So, option2&3 is wrong.

Selling common stock will increase inflow of cash which can be used to repay the loan and reduce the debt burden as a result reduces the debt-equity ratio. So, option4 is right.

By selling common stock

To improve this, the company should sell common stock.

>>selling common stock

Sell common stock.

>>>>>>>>>>>>. Sell common stock.