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MC Qu. 102 Charger Companys most recent... Charger Company's most recent balance sheet reports total assets of...

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Accounting

MC Qu. 102 Charger Companys most recent...

Charger Company's most recent balance sheet reports total assetsof $32,612,000, total liabilities of $19,462,000 and total equityof $13,150,000. The debt to equity ratio for the period is (roundedto 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 is8%. The amount paid to the bondholders for each semiannual interestpayment is:

Multiple Choice:

$67,200.

$420,000.

$33,600.

$37,800.

$75,600.

Answer & Explanation Solved by verified expert
4.1 Ratings (543 Votes)

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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