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A firm has a debt-to-equity ratio of 0.60 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity
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43 votes
43 votes
A firm has a debt-to-equity ratio of 0.60 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity

User Tarah
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1 Answer

16 votes
16 votes

Answer:

0.2

Step-by-step explanation:

by multiplying the book value with the debt value to the market value with equity value we get:

6x1 / 10x3 = 6/30 = 0.2

User Laszlo Sarvold
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