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Question: Accounts payable $516,000

Short-term debt $227,000

Current liabilities $743,000

Long-term debt $726,000

Shareholders' equity $487,000

Total $1,956,000

a. Compute Webb's debt ratio and interest-bearing debt ratio.

b. If the market value of Webb's equity is 2,078,000 and the value of the firm's debt is equal to its book value, assuming excess cash is zero, what is the debt-to-enterprise-value ratio for Webb?

c. If you were a bank loan officer who was analyzing whether or not to loan more money to Webb, which of the ratios calculated in parts a and b is most relevant to your analysis?

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M92770636

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