Answer:
Debt Outstanding = 5,630,635
Explanation:
Shares outstanding * book value per share = equity
315000 x 22.75 = 7,166,250
![debt \: ratio = liab \div assets = 0.44](https://tex.z-dn.net/?f=debt%20%5C%3A%20ratio%20%3D%20liab%20%5Cdiv%20assets%20%3D%200.44)
<u>where:</u>
assets = liab + equity
equity = 7,166,250
So we express asset in the debt ratio formula as the sum of liab and equity to be able to solve for liab
liab / (liab + 7,166,250) = 0.44
liab - .44liab = 7,166,250*0.44
liab = 7,166,250*.44/.56 = 5,630,635