A Vancouver firm has a debt-equity ratio of.56. What is the total debt ratio?
A) .29
B) .36
C) .44
D) 1.44
E) 1.56

Name: A Vancouver firm has a debt-equity ratio of.56. What is the total debt ratio? A) .29 B) .36 C) .44 D) 1.44 E) 1.56
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Quizplus · Accepted Answer

The debt-equity ratio is 0.56, which means debt is 0.56 times equity. The total debt ratio is calculated as debt divided by total assets (debt + equity). If equity is 1, then debt is 0.56, making total assets 1.56. Thus, the total debt ratio is 0.56 / 1.56 = 0.36.

A Vancouver Firm Has a Debt-Equity Ratio Of