A Company Had a Debt-To-Equity Ratio of 1

question 91

Essay

A company had a debt-to-equity ratio of 1.55 before issuing convertible bonds. This ratio included $500,000 in equity. The company issued convertible bonds. The value reported for the bonds on the balance sheet is $180,000 and the conversion rights are valued at $22,000.
Required:
After the issuance of the convertible bonds, what is the value of the debt-to-equity ratio?

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Definitions:

Legume

(1) A simple, dry fruit that develops from a single carpel and splits open at maturity along two sutures to release seeds. (2) Any member of the pea family (e.g., pea, bean, peanut, alfalfa).

Soil Organisms

A diverse group of living entities in soil, including bacteria, fungi, insects, and earthworms, contributing to nutrient cycling and soil health.

Prenatal Development

The process of growth and development within the womb from conception to birth.

Periods

Segments of time into which time is divided, often used in reference to historical epochs or women's menstrual cycles depending on context.