Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Challenge Industries has total assets of $122,200. If their total liabilities are $103,200, find the debt-to-equity ratio.
(Round to the nearest hundredth and enter the complete ratio. Do not enter spaces. Example: enter '0.93:1')
Expert Solution
Step 1
Debt-to-equity ratio or Debt equity ratio: The debt-to-equity ratio indicates that the company’s debt as a proportion of its stockholders’ equity. The debt-to-equity ratio is calculated using the formula:
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