Question
Neal Enterprises has no debt. Its current total value is $45 million. Assume the company sells $16 million in debt. Requirement 1: Ignoring taxes, what
Neal Enterprises has no debt. Its current total value is $45 million. Assume the company sells $16 million in debt.
| Requirement 1: |
| Ignoring taxes, what is the debt-equity ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Debt-equity ratio |
| Requirement 2: |
| Assume the companys tax rate is 40 percent. What is the debt-equity ratio? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) |
| Debt-equity ratio |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Technology And Finance Challenges For Financial Markets Business Strategies And Policy Makers
Authors: Morten Balling, Frank Lierman, Andy Mullineux
1st Edition
041529827X, 978-0415298278
