Question

Nano-Technologies bought out RT-Micro using financing as follows: $16 million from mortgages, $4 million from retained earnings, $12 million from cash on hand, and $30 million from bonds. Determine the debt-to-equity mix. (Please do not say that the cash on hand is not included but retained earnings is, but switch up the numbers. Please be clear on why your using each number. Thanks!)

Is cash on hand considered an equity or neither? Please explain why. With this information, calculating the ratio is easy. I'm just stuck on either including or not including the 12 million as there are multiple solutions that contradict one another. Thanks!

Answer 1

Given at Nano . Technologie boaant out RT-HCO LA nana ag 110m Hortagagesヰ16 milliar ínance finace from retained eaYning= $H milion Finance from ath or hand ニ$tamilion ffranca Pom bonds 30milltar) Nou To determine -the debt-to-epu2tymiz: cYe bonds axe paxt of det Pnonce TO Poer of equty ande not past nae From tha Totel delbt finance - Tnanceomt fnance from bond» : 46 million

Total debt-einance $46 milion Total Fauity Atnance - Fance from setainad earn - $iamilion Total -Ainane (46 t millten 58 milton Debit rato Total debt financa radto btai tnanca 146 58 аз 9-31-1 - t00-9.3