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XYZ Corporation is evaluating a potential merger with another company. The target company has total assets of $1,000,000 and total liabilities of $400,000. If the
XYZ Corporation is evaluating a potential merger with another company. The target company has total assets of $1,000,000 and total liabilities of $400,000. If the owner's equity is $600,000, calculate the debt-to-equity ratio for the target company and discuss its implications for the merger decision. Explore how the target company's capital structure and financial position may influence the valuation and negotiation process in the merger.
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