Use the Table for the Question(s)below

question 102

Multiple Choice

Use the table for the question(s) below.
Consider the following balance sheet:
-Luther Corporation's stock price is $39 per share and the company has 20 million shares outstanding.Its Debt -Capital Ratio for 2019 is closest to:

• A)0.696.
• B)0.37.
• C)1.89.
• D)0.654.

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Definitions:

Debt Financing

Involves borrowing funds from external sources to finance business operations or expand capital, typically through loans or issuing bonds.

Equity Financing

Equity financing is the process of raising capital through the sale of shares in an entity, giving investors ownership interests in the company.

Average Collection Period

The average number of days it takes for a company to collect its accounts receivable after a sale has been made.

Credit Terms

Conditions under which credit will be extended to a borrower, including repayment terms, interest rates, and due dates.