Which of the Following Is Correct for a Firm with a Debt-Equity

question 111

Multiple Choice

Which of the following is correct for a firm with a debt-equity ratio of .45 if long-term debt equals 500 and equity equals 2,000? The firm has:

• A)Current liabilities that is valued at 400
• B)Current assets that is valued at 400
• C)Retained earnings that are valued at 900
• D)preferred stock of 400 Total Debt = Current Debt + Long Term Debt
• Debt/Equity Ratio = .45
• Therefore, Debt/Equity Ratio x Shareholder Equity = Value of Total Debt
• )45 x 2,000 = 900 Total Debt
• Therefore, if Total Debt = 900 = Current Debt + Long Term Debt
• 900 = Current Debt + 500

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Definitions:

Incentive-Based

Refers to programs or strategies that motivate desired behaviors by offering rewards or benefits as incentives.

Pretests

Preliminary tests or assessments conducted to evaluate the effectiveness or performance of a campaign, product, or strategy before its full-scale launch.

In-House Agency

A marketing or advertising agency that is owned and operated within the company it serves, as opposed to being an external or separate entity.

Portfolio Test

A method used in advertising and marketing to evaluate the effectiveness of different advertisements by presenting them together with other ads to consumers.