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A firm has a debt-to-equity of 0.69 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity?

Respuesta :

Tundexi

Answer:

0.23

Explanation:

Debt to Equity  Ratio = Total debt/ Total common equity

Market to book Ratio = Market price per share / Book value per share

Book debt to Market equity Ratio = Debt to Equity  Ratio / Market to book Ratio

Book debt to Market equity Ratio = 0.69 / 3

Book debt to Market equity Ratio = 0.23

Therefore, the ratio is 0.23

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