Webster Global Services has a DebttoEquity Ratio of 04 What

Webster Global Services has a Debt-to-Equity Ratio of 0.4. What is the percentage of capital that is debt?

Solution

Debt-to-Equity Ratio =Debt/Equity
Hence debt=0.4Equity

Total =debt+equity

=1.4Equity

Hence % of capital that is debt=Debt/Total capital

=(0.4Equity/1.4Equity)

which is equal to

=28.57%(Approx).