A debt to assets ratio of .50 indicates that the company has:
A)more liabilities than stockholders' equity.
B)equal amounts of liabilities and stockholders' equity.
C)more stockholders' equity than liabilities.
D)no liabilities.

Question

Quizplus · Accepted Answer

A debt to assets ratio of 0.50 means that 50% of the company's assets are financed by debt, implying that the remaining 50% is financed by stockholders' equity, indicating equal amounts of liabilities and stockholders' equity.

A Debt to Assets Ratio of