Smith & Sons Has a Debt-Equity Ratio Of

question 86

Multiple Choice

Smith & Sons has a debt-equity ratio of.55. What is the total debt ratio?

• A) .35
• B) .46
• C) .49
• D) .51
• E) .55

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Definitions:

Zero-Coupon Bond

A bond bought at a price lower than its face value, with no recurring interest payments, that matures at its face value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, incorporating all interest payments and the repayment of principal, expressed as an annual rate.

Imputed Interest

Interest that is considered to be paid for tax purposes, even though no actual interest payment has been made, often applied to below-market or interest-free loans.

Zero-Coupon Bond

A bond that doesn't pay periodic interest, instead being sold at a discount and maturing at face value.