MC Qu. 102 Charger Companys most recent... Charger Company's most recent balance sheet reports total assets...

MC Qu. 102 Charger Companys most recent...

Charger Company's most recent balance sheet reports total assets of $32,612,000, total liabilities of $19,462,000 and total equity of $13,150,000. The debt to equity ratio for the period is (rounded to two decimals):

Multiple Choice:

0.60

1.68

0.40

0.68

1.48

MC Qu. 108 Morgan Company issues...

Morgan Company issues 9%, 20-year bonds with a par value of $840,000 that pay interest semiannually. The current market rate is 8%. The amount paid to the bondholders for each semiannual interest payment is:

Multiple Choice:

$67,200.

$420,000.

$33,600.

$37,800.

$75,600.

Solutions

Expert Solution

Debt to Equity ratio is the ratio of its total liabilities to its total equity.

Debt to Equity Ratio = Total Liabilities / Equity

a)Total liabilities = $ 19462000

b)Total Equity = $ 13150000

Debt to Equity ratio (a/b) = 1.48

Answer is 1.48

Interest paid to the bondholders for each semiannual payment =840000*9%*1/2

=37800

Answer is $ 37800

ekkarill92 answered 7 months ago

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