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Trina'sTrikes, Inc. reported a debt-to-equity ratio of 2 times at the end of 2018. If the firm's total debt at year-end was $10 million, how much equity does Trina's Trikes have?

Respuesta :

Answer: $5 million equity.

Explanation:

Given that,

Debt-to-equity ratio = 2

Total debt at year-end = $10 million

Therefore,

Debt to equity = [tex]\frac{Total Debt}{Equity}[/tex]

             Equity = [tex]\frac{Total Debt}{Debt\ to\ Equity\ Ratio}[/tex]

             Equity = [tex]\frac{10\ million}{2}[/tex]

             Equity  = $5 million

So, Trina's Trikes have $5 million equity.

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