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1 November, 02:45

When using the book value of equity, the debt to equity ratio for Luther in 2018 is closest to: A) 0.43 B) 2.29 C) 2.98 D) 3.57

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  1. 1 November, 06:19
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    The correct answer is 2.29

    Explanation:

    The debt-to-capital ratio (D/E) is a measurement of a company's financial leverage.

    D/E=Total debt/Total equity

    Total debt = (notes payable (10.5) + current maturities of long-term debt (39.9) + long-term debt (239.7) = 290.1

    Total Equity = 126.6

    D/E = 290.1/126.6=2.29

    Thus, the debt to equity ratio for Luther in 2018 is closest to 2.29
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