Wilde Corporation owns 30% of the outstanding stock of Bernie Inc. Bernie recorded net income of $10 million and paid


Wilde Corporation owns 30% of the outstanding stock of Bernie Inc. Bernie recorded net income of $10 million and paid dividends of $3 million in 2006. For each of the following ratios, state the effect (higher, lower, or no effect) that the use of the equity method would have on Wilde’s financial ratios compared to the use of the cost method in 2006. Explain your answers.


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