Question

A firm has a debt-to-equity ratio of 0.50 and debt equal to $35 million. The firm acquires new equipment with a 3-year operating lease that has a present value of lease payments of $12 million. The most appropriate analyst treatment of this operating lease will: increase the debt-to-equity ratio to 0.57. leave the debt-to-equity ratio unchanged at 0.5. increase the debt-to-equity ratio to 0.67.

Answer 1

($35 million + $12 million) / $70 million = 0.6714

Step-by-step explanation: