Bostian, inc. has total assets of $575,000. its total debt outstanding is $185,000. the board of directors has directed the cfo to move towards a debt-to-assets ratio of 55%. how much debt must the company add or subtract to achieve the target debt ratio? select the correct answer. a. $131,118 b. $131,250 c. $131,382 d. $131,316
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Ответ:
The company must add debt for an amount of $131,250.
Explanation:
The formula to calculate the debt-to-assets ratio is:
Debt-to-assets ratio= Total Liabilities/Total Assets
The company's debt-to-assets ratio is:
Debt-to-assets ratio= $185,000/$575,000
Debt-to-assets ratio= 0,32*100= 32%
Then, to determine the total liabilities necessary to have a debt-to-assets ratio of 55%:
Total liabilities= Debt-to-assets ratio*Total Assets
Total liabilities= 0,55*$575,000
Total liabilities= $316,250
$316,250-$185,000= $131,250
To have a debt-to-assets ratio of 55%, the company must add debt for an amount of $131,250.
Ответ:
Closing statement
Explanation:
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