asked 163k views
5 votes
A fire has destroyed many of the financial records at Anderson Associates. You are assigned to piece together information to prepare a financial report. You have found that the firm’s return on equity is 12% and its equity multiplier is 1.6667. Anderson has no preferred stock, its total current liabilities equal $250,000, and its total assets equal $2,500,000. The firm has no short-term debt. What is the firm’s total debt to total capital ratio if its ROE is 15%, its ROA is 10%, and its total current liabilities and total assets remain constant?

asked
User Gotit
by
8.5k points

1 Answer

4 votes

Answer:

25.9%

Step-by-step explanation:

The firm’s total debt to total capital ratio is 25.9%

answered
User MorphicPro
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7.7k points
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