Smile Industries capital structure consists of $1,000,000 of debt at 6 percent interest and 1,500,000 of stockholders equity at 2 percent. The proportion of Debt in the total capital structure is

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The total capital structure is $1,000,000 (debt) + $1,500,000 (equity) = $2,500,000. The proportion of debt is $1,000,000 / $2,500,000 = 0.4 or 40%.

Smile Industries Capital Structure Consists of $1,000,000 of Debt at 6