A Company with a Capital Structure Having a D/E Ratio

question 34

Multiple Choice

A company with a capital structure having a D/E ratio of 0.5 has:

• A) 66.66% debt
• B) 66.66% equity
• C) 33.33% equity
• D) 50.00% debt

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Definitions:

Observed Score

The score that is recorded or observed. See True Score.

Error Score

The difference between observed values and the values predicted by a model or measure, indicating measurement error or variance.

True Score

The score that, if it could be observed, would reflect the actual ability or behavior being measured. See Observed score.

Accounts Receivable Turnover

A financial metric indicating how many times a company collects its average accounts receivable within a certain period.