Debt-equity ratio and total debt ratio

Business & Finance
Tutor: None Selected Time limit: 1 Day

If a firm has a debt-equity ratio of 0.6, then what is its total debt ratio? Show your answer to the nearest .1%.  Thus an answer of 1/1.5 would be entered at 60.0, rather than .600. 

May 12th, 2015

D/E = 0.6

D/V = 0.6/(0.6+1) = 0.375

Debt ratio = debt / total assets = 0.375....assuming debt and equity are the only components of liability side

DEBT RATIO = 37.5 (ANSWER)

May 12th, 2015

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