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A corporation has annual sales of $18 million, total assets of $4 million, a debt ratio of 40%, depreciation expense of $200,000, and a tax
A corporation has annual sales of $18 million, total assets of $4 million, a debt ratio of 40%, depreciation expense of $200,000, and a tax rate of 40%. The corporation's total stockholders' equity is equal to
A) $5,600,000.
B) $2,800,000.
C) $2,400,000.
D) $1,800,000.
Debt ratio=TL/TA=TL/4=0.4TL=4*0.4=1.6A=L+E4=1.6+EE=4-1.6=2.4
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