If a company has $300 million of debt and $600 million of equity in its capital...
If a company has $300 million of debt and $600 million of equity in its capital structure, what are its debt/total capitalization and debt/equity ratios?
Homework Answers
HI,
Here debt = $300 million
equity = $600 million
total capital = debt +equity = 300+600 = $900 million
so debt/total capitalization = 300/900 = 1/3 = 0.33 or 33.33%
debt/equity = 300/600 = 1/2 = 0.5 or 50%
Thanks
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