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18 December, 15:33

The following selected information pertains to Wilson Company. Current liabilities: $100; long-term liabilities: $150; contributed capital: $120; retained earnings: $50; accumulated other comprehensive income: $20. The company's debt to equity ratio

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  1. 18 December, 17:42
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    The company's debt to equity ratio is 1.32

    Explanation:

    Wilson Company has following

    Total Debt = Current liabilities + long-term liabilities

    Total Debt = 100 + 150 = $250

    Total Capital = Contributed capital + Retained earnings + Accumulated other comprehensive income

    Total Capital = 120 + 50 + 20 = 190

    Debt to equity Ratio = Total Debt / Shareholders Equity

    Debt to equity Ratio = 250 / 190

    Debt to equity Ratio = 25 / 19

    Debt to equity Ratio = 1.32
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