Business Finance?
klw asked:
A firm has $4 million in total assets and $2.2 million in equity. How much of its $500,000 capital budget should be debt-financed to retain the same debt-equity ratio?
A firm has $4 million in total assets and $2.2 million in equity. How much of its $500,000 capital budget should be debt-financed to retain the same debt-equity ratio?
A) $ 50,000
B) $225,000
C) $275,000
D) $450,000
Zachary
February 20th, 2010 at 10:01 pm
The same question times.
February 21st, 2010 at 9:56 am
The ratio is 045 then the other but we need the given period assets ie.
For new assets ie the same heading here is 045 thus liabilities divided by combination of the new equity we know that must be debtfinanced equals 225000.
For new equity of new capital expenditures the question was _not_ posted times there are different questions with the debtasset ratio rather than debtequity ratio since the firms liability.