The Wilson Corp has the following relationships:
Sales/Total Assets= 2
ROA=4%
ROE=6%
A. What is their debt ratio? (answer should be 33%)
B. What is their debt-equity ratio? (answer should be .5)
Can you please show me the steps to get to these answers?
I know for debt ratio it relates to this:
DEBT(.5)
EQUITY(1)
= TA=1.5, so TDR= 33%
Where is the .5 for debt from? And how did we get 1 for equity?