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Zero Corporation has a market/book ratio equal to 2. Its stock price is $25 per share and it has 5.0 million shares outstanding. The firm's
Zero Corporation has a market/book ratio equal to 2. Its stock price is $25 per share and it has 5.0 million shares outstanding. The firm's total capital is $$135,000,000 and it finances with only debt and common equity. What is its debt-to capital ratio? (HINT: 1. Total Invested Capital = Equity + Debt where both equity and debt are book values. 2. Market price per share x number of shares outstandng = Mlarket Value of Equity. 3. You can find the Book value of equity using M/B ratio.) 7% 46% 54% 93%
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