Happiness Catering Has Total Assets of $385 Million

question 83

Multiple Choice

Happiness Catering has total assets of $385 million. Its total liabilities are $100 million and its equity is $285 million. Calculate its debt ratio.

• A) 28.5%.
• B) 26.0%.
• C) 58.8%.
• D) 38.5%.
• E) 35.1%.

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Definitions:

Call

In finance, an option contract giving the owner the right, but not the obligation, to buy a specified amount of an underlying asset at a specified price within a specified time.

Put Option Contract

A financial contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.

Exercise Price

The rate at which the owner of an option is able to purchase (in the case of a call option) or dispose of (in the case of a put option) the underlying asset.

Intrinsic Value

The actual value of a company or asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors.