A Vancouver firm has a debt-equity ratio of.56. What is the total debt ratio?

A) .29
B) .36
C) .44
D) 1.44
E) 1.56

Question

A Vancouver firm has a debt-equity ratio of.56. What is the total debt ratio?A)  .29B)  .36C)  .44D)  1.44E)  1.56

???????? ????? · Accepted Answer

Final Answer : B, Explanation :  The debt-equity ratio is 0.56, which means debt is 0.56 times equity. The total debt ratio is calculated as debt divided by total assets (debt + equity). If equity is 1, then debt is 0.56, making total assets 1.56. Thus, the total debt ratio is 0.56 / 1.56 = 0.36.

A Vancouver firm has a debt-equity ratio of.56. What is the total debt ratio?

A) .29
B) .36
C) .44
D) 1.44
E) 1.56

Definitions

Learning Objectives

Learning Objectives

Related questions