Asked by
Fernanda Elias
on Dec 09, 2024
Verified
Calculate the value of long-term debt given the following information: total debt = $100,000; debt/equity ratio = 0.40; long-term debt ratio = 0.2308.
A) $75,000
B) $70,000
C) $65,000
D) $60,000
E) $55,000
Debt/Equity Ratio
A calculation that shows how much a company relies on borrowed funds, found by dividing the sum of its liabilities by the equity owned by shareholders.
Long-term Debt Ratio
A financial ratio that shows the proportion of a company’s long-term debt compared to its total assets.
Total Debt
Refers to the sum of all financial obligations (short-term and long-term liabilities) owed by an individual or entity.
- Gain insight into the methodologies of equity valuation and the significance of debt and equity ratios on such assessments.
Verified Answer
AB
Learning Objectives
- Gain insight into the methodologies of equity valuation and the significance of debt and equity ratios on such assessments.