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Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 160,000...

Stewart Inc.'s latest EPS was $3.50, its book value per share was $22.75, it had 160,000 shares outstanding, and its debt-to-assets ratio was 46%. How much debt was outstanding?

Select the correct answer.

a. $3,100,741
b. $3,101,123
c. $3,102,269
d. $3,101,887
e. $3,101,505
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Answer #1

EPS = $3.50

Book value per share = $22.75

Shares outstanding = 160,000

Debt-to-assets ratio = 46%

Total book value of Equity = 160,000 * $22.75 = $3,640,000

Total Debt / total Assets = 0.46

Total Debt / (Total Debt + Total Equity) = 0.46

Total Debt / (Total Debt + $3,640,000) = 0.46

Total Debt = 0.46 Total Debt + 0.46*3,640,000

Total Debt = 0.46 Total Debt + $1,674,400

0.54 Total Debt = $1,674,400

Total Debt = $3,100,741

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