MC Qu. 102 Charger Companys most recent... Charger Company\'s most recent balanc
ID: 2339239 • Letter: M
Question
MC Qu. 102 Charger Companys most recent...
Charger Company's most recent balance sheet reports total assets of $32,612,000, total liabilities of $19,462,000 and total equity of $13,150,000. The debt to equity ratio for the period is (rounded to two decimals):
Multiple Choice:
0.60
1.68
0.40
0.68
1.48
MC Qu. 108 Morgan Company issues...
Morgan Company issues 9%, 20-year bonds with a par value of $840,000 that pay interest semiannually. The current market rate is 8%. The amount paid to the bondholders for each semiannual interest payment is:
Multiple Choice:
$67,200.
$420,000.
$33,600.
$37,800.
$75,600.
Explanation / Answer
Debt to Equity ratio is the ratio of its total liabilities to its total equity.
Debt to Equity Ratio = Total Liabilities / Equity
a)Total liabilities = $ 19462000
b)Total Equity = $ 13150000
Debt to Equity ratio (a/b) = 1.48
Answer is 1.48
Interest paid to the bondholders for each semiannual payment =840000*9%*1/2
=37800
Answer is $ 37800
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