The debt-equity ratio is 0.63.
The debt-equity ratio compares a corporation total liabilities to its shareholder equity and may be used to evaluate how lots leverage a company is using. better-leverage ratios tend to suggest a organization or inventory with better risk to shareholders. Overall assets is the sum of the modern and lengthy-term belongings. This quantity is used in common ratios, including liabilities to total belongings (overall debt to equity and go back on assets. overall assets can even constantly identical the sum of liabilities and shareholder's fairness.
Debt equity rate:-
Return on assets of 12.9 percent
Here, K d - cost of debt = 7.7
Ko - cost of asset
K e - cost of equity = 16.2
K e = Ko + ( ko - k d) * debt/equity
16.2 = 12.9 + (12.9 - 7.7)debt/equity
16.2 - 12.9 = (12.9 - 7.7) debt/equity
Debt/equity = 3.3/5.2
= 0.63
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