Find the Debt-To-Value Ratio for a Firm with a Debt-To-Equity

question 41

Multiple Choice

Find the debt-to-value ratio for a firm with a debt-to-equity ratio of 5.

• A)3/4
• B)7/9
• C)4/5
• D)9/11
• E)5/6

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Definitions:

Credit Terms

The conditions under which a seller extends credit to a buyer, including the repayment period and any discount for early payment.

Inventory

The complete list of items such as goods, property, and raw materials a company holds for the purpose of resale or repair.

Credit Memo

A document issued by a seller to a buyer, reducing the amount owed by the buyer to the seller, typically due to a return or an overcharge.

Gross Profit

Revenue minus the cost of goods sold (COGS), representing the profit a company makes after deducting the costs associated with making and selling its products.