Question

GenCorp. has a total debt of $370 million and stockholders' equity of $291 million. It also has 108 million shares outstanding, with a market price of $2 per share. What is GenCorp's market debt-equity ratio

Answer 1

1.71

Step-by-step explanation:

Gencorp's Market debt equity ratio is calculated as;

= Total debt ÷ (Market price per share × Outstanding shares)

Given that;

Total debt = $370 million

Market price per share = $2

Outstanding shares = 108

Therefore, Gencorp's Market debt equity ratio

= $370 million ÷ ($2 × 108)

= $370 million ÷ $216 million

= 1.71