Dewey Enterprises' capital structure consists of $2 million in debt and $1 million in equity.What is the firm's debt-to-equity ratio?
A).5
B)1
C)2
D)1.5

Name: Dewey Enterprises' capital structure consists of $2 million in debt and $1 million in equity.What is the firm's debt-to-equity ratio? A).5 B)1 C)2 D)1.5
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Question

Dewey Enterprises' capital structure consists of $2 million in debt and $1 million in equity.What is the firm's debt-to-equity ratio?
A).5
B)1
C)2
D)1.5

Quizplus · Accepted Answer

The debt-to-equity ratio is calculated by dividing the total debt by the total equity. Here, $2 million in debt divided by $1 million in equity equals a ratio of 2.

Dewey Enterprises' Capital Structure Consists of $2 Million in Debt and $1 Million