Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)
3rd Edition
ISBN: 9780133507676
Author: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Publisher: PEARSON
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Chapter 2, Problem 11CC
Summary Introduction

Debt-to-Equity-Ratio:

A debt-to-equity-ratio helps to find out a firm’s leverage which shows the extent to which the firm takes debt in order to raise funds for its projects. This ratio indicates that how much debt a firm has taken over the equities as a source of finance. It is calculated by dividing the total liabilities of the firm including the short − term and long − term debts which also contain the debts of current maturity as well, by the value of the total equity that the shareholders own. It is represented as under:

Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance), Chapter 2, Problem 11CC

To Identify:

What a high debt-to-equity-ratio signifies.

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Fundamentals of Corporate Finance (3rd Edition) (Pearson Series in Finance)

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Financial ratio analysis; Author: The Finance Storyteller;https://www.youtube.com/watch?v=MTq7HuvoGck;License: Standard Youtube License