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Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $14 per share...

Kaye's Kitchenware has a market/book ratio equal to 1. Its stock price is $14 per share and it has 4.9 million shares outstanding. The firm's total capital is $130 million and it finances with only debt and common equity. What is its debt-to-capital ratio? Round your answer to two decimal places.

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Expert Solution

Debt to capital = Total debt/Total Capital

Total Capital = Debt + Equity

Equity = $14 * 4.9 million = 68.6 million

Debt = $130 million - $68.6 million = $61.4 million

Debt to total capital = $61.4 million/$130 million = 0.47

jeff jeffy answered 2 years ago
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