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A firm has a debt –to –equity ratio of 0.51. The firm has $495,629.00 in debt....

A firm has a debt –to –equity ratio of 0.51. The firm has $495,629.00 in debt. What is the value of their total assets?

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Answer #1
a.
Debt-to-Equity Ratio = Debt/Equity
0.51 = Debt/Equity
Debt =           0.51
Equity =           1.00
Equity = 495629*(1.00/0.51)
= $    9,71,822
b.
As per balance sheet equation,
Total Assets = Debt + Equity
= $    4,95,629 + $ 9,71,822
= $ 14,67,451
Thus,
Value of total assets $ 14,67,451
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