Afire has destroyed many of the financial records at anderson associates. you are assigned to piece together information to prepare a financial report. you have found that the firm’s return on equity is 12% and its equity multiplier is 1.6667. anderson has no preferred stock, its total current liabilities equal $250,000, and its total assets equal $2,500,000. the firm has no short-term debt. what is the firm’s total debt to total capital ratio if its roe is 15%, its roa is 10%, and its total current liabilities and total assets remain constant?

25.9%

Explanation:

The firm’s total debt to total capital ratio is 25.9%

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.