What Is the Approximate Total Debt Ratio for a Firm

question 105

Multiple Choice

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

• A)32.1%
• B)35.5%
• C)37.6%
• D)39.4% If total debt/equity = .65 then total liabilities/total assets = .65/1.65

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Definitions:

Price Range

The difference between the highest and lowest selling price of a good or service in a given market over a certain period of time.

Firm

An organization that comes into being when a person or a group of people decides to produce a good or service to meet a perceived demand.

Profit-Maximizing

A strategy or approach aimed at achieving the highest possible profit margins within a business operation.

Demand Shift

A change in the overall demand for a good or service due to factors like consumer preferences, incomes, prices of related goods, or population changes, leading to a new demand curve.