Question

Determine the debt-equity ratio of XYZ Ltd

Debt outstanding = 800,000

Equity capital = 1000,000

Share reserves = 100,000

A 0.73 Correct Answer Incorrect Answer
B 1.25 Correct Answer Incorrect Answer
C 1.37 Correct Answer Incorrect Answer
D 0.91 Correct Answer Incorrect Answer
E 0.80 Correct Answer Incorrect Answer

Solution

Debt equity ratio = debt /equity = 800000/ (1000000+100000) = 800000/1100000= 0.72

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