A firm has a total debt ratio of .53.This means the firm has $.53 in debt for every:
A)$.47 in equity.
B)$.47 in total assets.
C)$1.53 in total assets.
D)$1 in total equity.
E)$1.53 in total equity.

Question

Quizplus · Accepted Answer

The total debt ratio of .53 indicates that 53% of the firm's assets are financed by debt, leaving 47% financed by equity. Thus, for every $0.53 in debt, there is $0.47 in equity.

A Firm Has a Total Debt Ratio of