What is the total capital of a company with a 50% debt/equity ratio if equity is assumed to be 100?

To determine the total capital of a company with a 50% debt/equity ratio, we first need to understand the implications of the given ratio. A debt/equity ratio of 50% means that for every dollar of equity, the company has $0.50 of debt.

If equity is assumed to be 100, we can calculate the debt as follows:

1. Given the debt/equity ratio of 0.5 (which comes from the 50% ratio), we set up the relationship: [ \text{Debt} = 0.5 \times \text{Equity} ] [ \text{Debt} = 0.5 \times 100 = 50 ]

2. Now, we can find the total capital, which is the sum of debt and equity: [ \text{Total Capital} = \text{Debt} + \text{Equity} ] [ \text{Total Capital} = 50 + 100 = 150 ]

Therefore, the total capital of the company amounts to 150. This calculation clearly shows how the provided figures translate into the company’s total capital structure, taking into account the