Fibonacci Property Management's Balance Sheet Shows Total Liabilities of $5

question 89

Multiple Choice

Fibonacci Property Management's balance sheet shows total liabilities of $5 million and total assets of $13 million.Interest bearing liabilities total $3 million (book value) .Excess cash $500,000.The market value of Fibonnacci's equity is $21 million.What is Fibonacci's Debt to Enterprise Value ratio?

• A).38
• B).23
• C).125
• D).106

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Definitions:

Higher Risk

Higher risk denotes investments or actions that have a greater chance of loss or volatility, often associated with potentially higher returns.

Tax Rates

Percentages at which income, property, or sales are taxed by the government.

Required Rate

The minimum return that investors demand for investing in a specific asset or undertaking a project.

Risk Premium

The additional return an investor expects to receive from an investment by taking on a higher level of risk.