Southern corp. has a debt-to-equity ratio of 1.75 and total assets of $275 million. southern is considering issuing another $20 million of debt and another $20 million of equity. what will be southern’s debt-to-equity ratio after the issuance?

1.625

Explanation:

Debt to equity ratio = Debt ÷ Equity

or

1.75 = Debt ÷ Equity

or

Debt = 1.75 × Equity

also,

Total assets = Debt + Equity

or

$275 million = 1.75 × Equity + Equity

or

$275 million = 2.75 × Equity

or

Equity = $100 million

Therefore,

Debt = $275 million - Equity

= $275 million -  $100 million

= $175 million

Now,

after issuance,

Total debt = $175 million + $20 million

= $195 million

and,

Equity = $100 million + $20 million

= $120 million

Therefore,

Southern’s debt-to-equity ratio after the issuance

= $195 million ÷ $120 million

= 1.625

engaging in financial planning?

just took my test

ell really, the setting was in franklin and lincoln visits franklin even after he moved to columbus, and he went to school