If a Firm Has Three Times as Much Equity as Debt

question 72

Multiple Choice

If a firm has three times as much equity as debt in its capital structure, then the firm has:

• A)25.0% debt
• B)66.7% equity
• C)40.0% debt
• D)33.3% equity Let x = % of debt
• Then 3x = % of equity
• And 4x = 100% \(\rarr\) x = 25.0%

---

Definitions:

JIT

Just-in-time refers to a strategy that aims to improve a business's return on investment by reducing in-process inventory and associated carrying costs.

Lean Operations

A business methodology that focuses on minimizing waste and maximizing value in the production process through continuous improvement and responding to customer demands.

Work Centre

A specific location where work is performed, characterized by certain capabilities, resources, and capacities.

Kanban

The Japanese word for card, which has come to mean “signal”; a kanban system moves parts through production via a “pull” from a signal.