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Seneca had a debt-to-equity ratio of 1.60 before issuing convertible bonds. This ratio included $50,000 in equity. Seneca issued convertible bonds. The value reported for
Seneca had a debt-to-equity ratio of 1.60 before issuing convertible bonds. This ratio included $50,000 in equity. Seneca issued convertible bonds. The value reported for the bonds on the balance sheet is $80,000, and the conversion rights are valued at $1,200. After the issuance of convertible bonds, what is the value of the debt-to-equity ratio?
A. 1.82
B. 1.72
C. 1.6
D. 6.25
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