Company has debt-to-total assets ratio is 0.4. What is its debt to equity ratio

Solutions

Expert Solution

Representatiion:

Assest = A

Debt = D

Equity = E

It is known that A = D + E

therefore, E = A - D

To find Debt to equity ratio, we write it as

D/E = D/(A-D)

[E is written as A - D in the above equation]

The above equation can be written as

D/E = (D/A)/[1-(D/A)]

We know that D/A is 0.4

On substituting,

D/E = 0.4/(1-0.4)

= 0.4/0.6

D/E = 0.66

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Isolation Company has debt-equity ratio of 0.7. Return on Assets is 9% and total equity is...

Isolation Company has debt-equity ratio of 0.7. Return on Assets is 9% and total equity is 511,312. What is the Net Income

Firm A has a beta of 1.3 and a debt-to-equity ratio of 0.4 and an interest...

Firm A has a beta of 1.3 and a debt-to-equity ratio of 0.4 and an interest rate of 9% on its debt. It has chosen Firm P as a proxy for a new line of business it is considering. Firm P has a beta of 1.6 and a debt to equity ratio of 0.8 and the expected return on the S&P 500 is 12% and the risk-free rate is 5.5%. The marginal tax rate is 40%. A. Find the correct...

a firm has total assets of $79,600, cash of $25,000 and a debt-equity ratio of 0.25....

a firm has total assets of $79,600, cash of $25,000 and a debt-equity ratio of 0.25. What is the equity multiplier?

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25,...

Austral & Company has a debt ratio of 0.5, a total assets turnover ratio of 0.25, and a profit margin of 10%. The Board of Directors is unhappy with the current return on equity (ROE), and they think it could be doubled. This could be accomplished (1) by increasing the profit margin to 12% and (2) by increasing debt utilization. Total assets turnover will not change. What new debt ratio, along with the new 12% profit margin, would be required...

Gutweed, Inc. has total equity of $133,000 and total assets of$225,000. What is the debt-equity...

Gutweed, Inc. has total equity of $133,000 and total assets of $225,000. What is the debt-equity ratio?0.970.820.690.76Fennel, Inc. has inventory of $2,200, current liabilities of $3,100, cash of $1,900, and accounts receivable of $3,900. What is the cash ratio?0.450.610.720.53

a firm has a debt-equity ratio of 1.46.What is the total debt ratio? 0.59 0.46 0.77...

a firm has a debt-equity ratio of 1.46.What is the total debt ratio? 0.59 0.46 0.77 0.68

Norton Company has a debt-to-equity ratio of 1.02, ROA of 11.98percent, and total equity of...

Norton Company has a debt-to-equity ratio of 1.02, ROA of 11.98 percent, and total equity of $1,815,000. What are the company’s equity multiplier, debt ratio, and ROE? (Roundanswers to 2 decimal places, e.g. 12.55 or 12.55%.)The company’s equity multiplier is , its debt ratio is , and its ROE is %.Click if you would like to Show Work for this question:Open Show Work

WFG has total equity of 50,000 and total assets of 90,000. what is the total debt...

WFG has total equity of 50,000 and total assets of 90,000. what is the total debt ratio?

Holly, Inc. has sales of $292,510, total assets of $420,400, a debt-equity ratio of 1.2, and...

Holly, Inc. has sales of $292,510, total assets of $420,400, a debt-equity ratio of 1.2, and a profit margin of 7.5 percent. What is the equity multiplier? 1.6 2.6 1.2 2.2 Thyme, Inc. has total assets of $72,000, a debt-equity ratio of 0.8, and net income of $7,700. What is the return on equity? 27.78 percent 24.14 percent 22.56 percent 19.25 percent Ferns, Inc. paid $14,000 in dividends and $10,300 in interest over the past year. Sales totaled $139,700 with...

Y3K, Inc., has sales of $4,500, total assets of $3,300, and a debt?equity ratio of 1.50....

Y3K, Inc., has sales of $4,500, total assets of $3,300, and a debt?equity ratio of 1.50. If its return on equity is 17 percent, what its net income? rev: 09_17_2012 $561.00 $164.56 $765.00 $224.40 $59.84

Subjects