Respuesta :
The firm's debt-equity ratio is [tex]26.9 \%[/tex].
Debt-equity ratio:
The debt-equity ratio serves as a gauge for how equally creditors and owners or shareholders contributed to the capital used by the company. The debt-equity ratio is the simple ratio of all long-term debt and equity capital in the company.
The phrase debt ratio refers to a financial ratio that assesses how much leverage a business has. The ratio of total debt to total assets, represented as a decimal or percentage, is known as the debt ratio. The percentage of a company's assets that are financed by debt is one way to understand it.
Debt-equity ratio = Equity multiplier [tex]$-1$[/tex]
As per Dupont analysis:
Return on equity = Profit margin ×Total assets turnover × Equity multiplier [tex]$0.1859=0.097 * 1.51 *$[/tex] Equity multiplier
Equity multiplier [tex]$=0.1859 / 0.14647=1.269$[/tex] (Approximately)
On substituting Equity multiplier [tex]1.269[/tex], we get
Debt-equity ratio [tex]$=1.269-1=0.269$[/tex]
Therefore, debt-equity ratio[tex]$=26.9 \%$[/tex]
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