Corner Books has a debt-equity ratio of .57. What is the total debt ratio?
A) 0.36
B) 0.30
C) 0.44
D) 2.27
E) 2.75

Name: Corner Books has a debt-equity ratio of .57. What is the total debt ratio? A) 0.36 B) 0.30 C) 0.44 D) 2.27 E) 2.75
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Question

Quizplus · Accepted Answer

The debt-equity ratio is given as 0.57, which means debt is 0.57 times the equity. The total debt ratio is calculated as Debt / (Debt + Equity). If Debt = 0.57E and Equity = E, then Total Debt = 0.57E + E = 1.57E. The total debt ratio is 0.57E / 1.57E = 0.36.

Corner Books Has a Debt-Equity Ratio of