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You are considering a stock investment in one of two firms both of which operate in the same industry. LotsofDebt finances with: $ 3 4

You are considering a stock investment in one of two firms both of which operate in the same industry. LotsofDebt finances with: $34.75 million in assets, $32.50 million in debt and $2.25 million in equity. LotsofEquity finances with $34.75 miion in assets with $2.25 million in debt and $32.50 in equity. Calculate the debt ratio for the two firms. What does your calculation tell you?

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