The book value of a firm's total assets is $550,000 and it has pledged $500,000 of those assets to secure a loan of $450,000.The firm's total liabilities are $425,000.The pledged assets to secured liabilities is
A)1.1
B)1.3
C)1.4
D)1.7
E)2.2

Question

Quizplus · Accepted Answer

The pledged assets to secured liabilities ratio is calculated by dividing the pledged assets ($500,000) by the secured liabilities ($450,000), which equals 1.1.

The Book Value of a Firm's Total Assets Is $550,000