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Vitalstrike82,
DebttoEquity (D/E) = 50% = 0.50 means that
D/E = 0.5/1
which implies that Debt is half the amount of Equity and since firm’s capital structure comprise of Debt and Equity only, Assets will be financed by just Debt and Equity.
So, Assets = Debt + Equity = 0.5 + 1 = 1.5
It means
% of Debt = 0.5/1.5 = 0.333 = 33.33% and,
% of Equity = 1/1.5 = 0.6667 = 66.67%
I hope u get it know! In case of any problem feel free to ask! Cheers! |
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