What Is the Approximate Total Debt Ratio for a Firm

question 104

Multiple Choice

What is the approximate total debt ratio for a firm with a total debt-equity ratio of .65?

• A) 35%
• B) 39%
• C) 54%
• D)65%

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Definitions:

Paid-In Capital

The total amount of money or value of property that shareholders have contributed to a company in exchange for shares, excluding earnings retained by the company.

Journalize

The process of recording transactions in a journal before they are posted to ledger accounts.

Paid-In Capital

Funds raised by a company through the issuance of securities, reflecting the total amount of invested capital that shareholders have contributed directly.

Retained Earnings

Profits that a company keeps after dividends are paid, often reinvested into the business or used to pay off debt.