onelife1

It should be D/(1-D)

Debt = $1 million, Equity=$2 million. What's your D/E ratio? (1/3)/(2/3), or 33/67 (note that 33+67 =100).
What's your D/(1-D)? It is (1/3)/(1-(1/3)) = 33/67.


Debt = $1 million, Equity=$3 million. What's your D/E ratio? (1/4)/(3/4), or 25/75 (note that 25+75=100).
What's your D/(1-D)? It is (1/4)/(1-(1/4)) = 25/75.