Compute the debt-to-equity ratio

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Debt-to-Equity Ratio

Consider the following information:

Short-term debt                                                              

$ 10,000

Interest expense                                                              

7,500

Total current liabilities                                                           

25,000

Long-term debt                                                               

70,000

Cash                                                                       

2,700

Total liabilities                                                                

120,000

Total stockholders' equity                                                        

90,000

Income before income taxes                                                       

12,000

Compute the debt-to-equity ratio assuming that (1) debt is defined to include all liabilities, (2) debt is defined to include just interest-bearing debt, and (3) debt is defined to include just long-term, interest-bearing debt.

Reference no: EM13546278

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