Use the table for the question(s)below.
Consider the following balance sheet:

-Luther Corporation's share price is $39 and the company has 20 million shares outstanding. Its Debt -Capital Ratio for 2012 is closest to:
A)0.696
B)0.37
C)1.89
D)0.654

Question

Use the table for the question(s)below.
Consider the following balance sheet:
  
-Luther Corporation's share price is $39 and the company has 20 million shares outstanding. Its Debt -Capital Ratio for 2012 is closest to:
A)0.696 
B)0.37 
C)1.89 
D)0.654

Quizplus · Accepted Answer

Debt-Capital Ratio = Debt / CapitalCapital = Share Price * Number of Shares OutstandingCapital = $39 * 20 million = $780 millionDebt-Capital Ratio = Debt / $780 millionDebt-Capital Ratio = 0.696

Use the Table for the Question(s)below