Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 18, Problem 2P
Summary Introduction

To determine: A constant debt-equity ratio for Company C.

Introduction:

Debt-equity ratio indicates how much debt a company uses to finance its assets relative to the value of the shareholders' equity. This ratio is calculated by dividing the company’s total liabilities by its shareholders equity; it is used to measure the company’s financial leverage.

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