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Debora [2.8K]
3 years ago
10

Robert owns a $214,000 town house and still has an unpaid mortgage of $150,000. In addition to his mortgage, he has the followin

g liabilities:
Visa $638
MasterCard 509
Discover card 405
Education loan 942
Personal bank loan 887
Auto loan 4,720
Total $8,101

Robert’s net worth (not including his home) is about $21,700. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. What is Robert's debt-to-equity ratio? Has he reached the upper limit of debt obligations? Explain.
Business
1 answer:
Ivenika [448]3 years ago
4 0

Answer and Explanation:

The computation of the debt-equity ratio is shown below

Debt - equity ratio = Debt ÷ Equity

= $8,101 ÷ $21,700

= 0.37

As the ratio is lower than 1 so Robert would not reached the upper limit with respect to the debt obligations

Hence, the same is relevant and considered too

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