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A firm has total debt of $5,900 and a debt-equity ratio of 0.57. What is the value of the total assets?

A. $6,128.05.
B. $7,253.40.
C. $9,571.95.
D. $11,034.00.
E. $13,358.77.

1 Answer

2 votes

Answer:

See below

Step-by-step explanation:

Given the above information, we need to calculate first the total equity.

Total equity = Total debt / (Debt - Equity ratio)

Total equity = $5,900 / 0.57

Total equity = $10,350.877

Now,

Total assets = Total debt + Total equity

Total assets = $5,900 + $10,350.88

Total assets = $16,250.88

Therefore the value of the total assets are $16,250.88

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