The proportion of debt in this firm's capital structure is

Name: The proportion of debt in this firm's capital structure is
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Question

Quizplus · Accepted Answer

To find the proportion of debt in the firm's capital structure, we need to divide the total debt by the sum of total debt and total equity. In this case, total debt is $600,000 and total equity is $400,000. 
Proportion of debt = Total debt / (Total debt + Total equity)
= $600,000 / ($600,000 + $400,000)
= $600,000 / $1,000,000
= 0.6 or 60%.
Therefore, the answer is C) 60%.

The Proportion of Debt in This Firm's Capital Structure Is