The debt ratio is usually computed using book values for both debt and equity.

Name: The debt ratio is usually computed using book values for both debt and equity.
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Question

Quizplus · Accepted Answer

The debt ratio is calculated by dividing total debt by the sum of total debt and total equity. The values used in the calculation may be based on book values or market values. However, since the question specifically mentions book values, the correct answer is A.

The Debt Ratio Is Usually Computed Using Book Values for Both