Series 79 practice questioneasyLeverage Ratios
A company has $20 million in total debt and $80 million in equity. What is its debt-to-equity ratio?
- A0.25✓ Correct answer
- B0.50
- C1.00
- D0.20
Explanation
Why A — 0.25
Debt-to-equity ratio = $20M / $80M = 0.25. The other choices result from common calculation mistakes.
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