Question
A firm has assets of $250 million, of which $25 million is cash. It has total debt of $100 million (there are no other liabilities).
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A firm has assets of $250 million, of which $25 million is cash. It has total debt of $100 million (there are no other liabilities). If the firm were to repurchase $10 million of its stock with cash, what would its new debt-to-equity ratio be?
A. 71.4%
B. 28.6%
C. 80%
D. 20%
A firm has assets of $250 million, of which $25 million is cash. It has total debt of $100 million (there are no other liabilities). If the firm were to repurchase $10 million of its stock with cash, what would its new debt-to-equity ratio be?
| A. 71.4% | ||
| B. 28.6% | ||
| C. 80% | ||
| D. 20%
|
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Accounting What the Numbers Mean
Authors: David Marshall, Wayne McManus, Daniel Viele
12th edition
978-1260565492
