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A company's balance sheet shows total assets of $1,200,000 and total liabilities of $300,000. If the owner's equity is $900,000, calculate the debt-to-assets ratio and
A company's balance sheet shows total assets of $1,200,000 and total liabilities of $300,000. If the owner's equity is $900,000, calculate the debt-to-assets ratio and discuss its implications for the company's financial risk management and capital structure decisions. Explore how variations in the debt-to-assets ratio can affect a company's creditworthiness, cost of capital, and long-term financial viability.
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