 Business
5 June, 03:46

# Brookman Inc's latest EPS was \$2.75, its book value per share was \$22.75, it had 275,000 shares outstanding, and its debt/total invested capital ratio was 44%. The firm finances using only debt and common equity, and its total assets equal total invested capital. How much debt was outstanding? Do not round your intermediate calculations. a. \$5,013,938 b. \$4,571,531 c. \$5,358,031 d. \$4,915,625 e. \$4,768,156

+3
Answers (1)
1. 5 June, 05:42
0
Outstanding debt = \$4,915,625

Explanation:

Since the debt capital ratio 44%, then the equity / capital ratio is 56% i. e (100% - 44%)

The total value of stock = Book value per share * outstanding capital

= \$22.75 * 275,000 = \$6,256,250.

The total value of equity = 56% * total value of assets

\$6,256,250. = 56% * y

6,256,250/56% = y

11,171,875 = y

Total value of assets = \$11,171,875

Debt outstanding = debt/capital ratio * Assets

= 44% * \$11,171,875

= \$4,915,625
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Brookman Inc's latest EPS was \$2.75, its book value per share was \$22.75, it had 275,000 shares outstanding, and its debt/total invested ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.