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What is the the debt-equity ratio for this problem? Looking at past numbers on an average...

What is the the debt-equity ratio for this problem?

Looking at past numbers on an average basis, the debt-equity ratio has consistently centered around 114% for which Dysinger’s current debt level is $31,625,750 with an average maturity of 6 years and an interest rate on this debt averaging 6.835% No equity value given.

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Answer #1

The formula of debt equity ratio is Total debt / shareholder's equity and is usually represented in ratio terms, for example, a debt equity of 2:1 is equal to 200%. In this case, since the debt to equity ratio has remained at 114%, which means at 1.14 : 1. The debt of $31,625,750 is 114%, the equity can be calculated by dividing total debt by 114%, hence equity = $31,625,750 / 114% = 27,741,885.

Hence, the debt to equity ratio of this problem is $31,625,750 / 27,741,885 or 1.14 : 1

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