Hello tutor please provide correct answer accounting question If a firm has $100,000 debt and $100,000 equity, thena. The return on equity ratio is 1.b. The debt-to-equity ratio is 1.c. The return on assets ratio is 0.5.d. The firm has too much debt.

Step 1: Define Debt to Equity RatioThe ratio of total debt relative to total equity is called the…

Answered: If a firm has $100,000 debt and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A firm has a debt to equity ratio need solve this question ❓
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A firm has a return on assets of 7.8 percent and a cost of equity of 11.9 percent. What is the pretax cost of debt if the debt–equity ratio is .72? Ignore taxes.
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Company A's simple EPS is $1 and diluted EPS is $.50. Company B's simple EPS is $1.5 but his diluted EPS is $.25. What would this tell you about the company? Next, suppose Company A's debt to equity ratio is 2 and Company's B's debt to equity ratio is .5. What would this tell you about the company? Besides profitability, what would the measures about tell you about how the company raises money?
A firm had a debt ratio of 1.20. The pretax cost of debt is 8% and the reqiured return on asset is 13%. What is the cost of equity if you Ignore taxes? A) 18.24% B) 20.14% C)17.67% D) 19.57% E) 19%
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What is the value of the total assets?
13. A short-term creditor would be interested in A. profitability ratio. B. efficiency ratio. C. liquidity ratio. D. leverage ratio. The quick ratio of a firm would be unaffected by which of the following? 14. A. Land held for investment is sold for cash. B. Equipment is purchased, financed by a long-term debt issue. C. Inventories are sold for cash D. Inventories are sold on a credit basis.
Under what situation will return on equity be higher than return on investment? a. When assets exceed liabilities. b. When the debt to equity ratio is greater than 1.0. c. When net income is higher than it was in the previous year. d. When a company earns more on borrowed money than the interest it must pay.
Aa.5

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If a firm has $100,000 debt and $100,000 equity, then a. The return on equity ratio is 1. b. The debt-to-equity ratio is 1. c. The return on assets ratio is 0.5. d. The firm has too much debt.