A $500 Million Firm Has 10 Million Shares Outstanding

question 17

Essay

A $500 million firm has 10 million shares outstanding. The market price per share is
$30. What is its current debt-equity ratio? What will its debt-equity ratio be if the
market price per share drops to $20, all else equal?

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Definitions:

Capsular Space

A space between the glomerular capsule and the glomerulus in the kidney where the initial stages of filtration of blood to form urine occur.

Parietal Glomerular Capsule

Also known as Bowman's capsule; a cup-like sac at the beginning of the tubular component of a nephron in the kidney that performs the first step of filtering blood to form urine.

Podocytes

Specialized cells in the kidney that wrap around capillaries of the glomerulus, playing a critical role in filtration.

Glomerular Capillaries

A network of tiny blood vessels located within the kidneys' glomeruli that play a crucial role in filtering blood to form urine.