The Debt-to-Total Capital ratio is 1/5 or 0.2.
It should be noted that the debt to capital ratio is used to measure the financial leverage of a company.
It should be noted that the debt to capital ratio will be:
= Total debt / Equity
= 2/10
= 1/5
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Using the High Case, calculate the Debt-to-Total Capital ratio for 2020 when the debt is $2 million and the capital is $10 million.
