Karen Price Has Determined That Her Net Worth Is $30,000,excluding

question 122

Multiple Choice

Karen Price has determined that her net worth is $30,000,excluding her home.She owes $80,000 on her mortgage and $15,000 on a car loan.What is Karen's debt-to-equity ratio?

• A)3.2
• B)2.0
• C)0.5
• D)2.7
• E)0.3

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Definitions:

Stockholders' Equity

Represents the portion of the total value of a company that is owned by its shareholders.

Debt to Assets Ratio

A financial metric measuring the proportion of a company's total assets financed through debt, indicating financial leverage and risk.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations based on its current income, indicating financial stability against interest charges.

Coupon Interest Rate

The fixed rate of interest paid by a bond to its holder at specified intervals until maturity.