Question

Brookman Inc's latest EPS was $2.75, its book value per share was $22.75, it had 315,000 shares outstanding, and its debt ratio was 44%. How much debt was outstanding?a. $4,586,179b. $4,827,557c. $5,081,639d. $5,349,094e. $5,630,625

Answer 1

Answer:

Debt Outstanding = 5,630,635

Explanation:

Shares outstanding * book value per share = equity

315000 x 22.75 = 7,166,250

$debt \: ratio = liab \div assets = 0.44$

where:

assets = liab + equity

equity = 7,166,250

So we express asset in the debt ratio formula as the sum of liab and equity to be able to solve for liab

liab / (liab + 7,166,250) = 0.44

liab - .44liab = 7,166,250*0.44

liab = 7,166,250*.44/.56 = 5,630,635

Answer 2

Total Debt = 5,630,635

Outstanding shares * book value per share = equity

315000 x 22.75 = 7,166,250

where:

assets = amount of debt + equity

equity = 7,166,250

amount of debt = 7,166,250 * .44 / .56 = 5,630,635

Further Explanation

Securities can be categorized as debt and equity such as bonds and stocks. Companies or institutions that issue securities are called publishers. These securities may consist of debt instruments, commercial papers, shares, bonds, units of collective investment contracts (such as mutual funds, futures contracts on securities, and any derivatives of securities). The qualifications of an effect vary according to the rules in each country.

Securities can be in the form of certificates or can be in the form of electronic records that are:

• Performance certificate, meaning that the owner entitled to the securities is the securities holder/holder.
• Certificate in the name means that the owner of the securities entitled to the said securities is whose name is recorded on a list held by the issuer or listing agency.

The classification of effects is based on the following categories:

• Securities issuing company
• Currency denomination used
• Proprietary rights
• The maturity period
• Level of securities liquidity
• Interest payment
• Tax treatment

Learn More

Debt  https://brainly.com/question/12967829

Outstanding shares  https://brainly.com/question/12967829

Details

Grade: College

Subject: Business

Keyword: debt, outstanding, shares