What is the percentage of debt capital if total equity is 100 and the debt/equity ratio is 50%?

To determine the percentage of debt capital based on the total equity and the debt/equity ratio, we first need to understand the relationship between debt and equity. In this case, if total equity is given as 100 and the debt/equity ratio is 50%, this means that for every dollar of equity, there is 50 cents of debt.

Here is how to calculate the amount of debt:

1. The debt/equity ratio of 50% can be expressed as 0.5. This ratio indicates that for every unit of equity, you have 0.5 units of debt.
2. If total equity is 100, then the total debt would be calculated as 50% of 100, which equals 50.

Next, we calculate the total capital, which is the sum of debt and equity. This is:

• Total capital = Total equity + Total debt = 100 + 50 = 150.

Finally, to find the percentage of debt capital, we take the total debt divided by the total capital:

• Percentage of debt capital = (Total debt / Total capital) × 100 = (50 / 150) × 100 = 33.33%.

When rounded, this results in