SS Stores has total debt of $4,910 and a debt-equity ratio of 0.52. What is the value of the total assets?
A) $16,128.05
B) $7,253.40
C) $9,571.95
D) $11,034.00
E) $14,352.31

Question

Quizplus · Accepted Answer

The debt-equity ratio is defined as:

Debt-Equity Ratio = Total Debt / Total Equity

We know the debt-equity ratio is 0.52, so we can set up an equation to solve for total equity:

0.52 = 4,910 / Total Equity

Solving for Total Equity:

Total Equity = 4,910 / 0.52
Total Equity = 9,442.31

We can now use the formula for total assets:

Total Assets = Total Equity + Total Debt
Total Assets = 9,442.31 + 4,910
Total Assets = 14,352.31

Therefore, the value of the total assets is $14,352.31, which is choice E.

SS Stores Has Total Debt of $4,910 and a Debt-Equity