hard · Principles of Finance

A firm has 200,000,000 in Debt and 200,000,000 in Equity. After an inventory write-down of 50,000,000 with a 40% tax rate, what is the new Debt-to-Equity (D/E) ratio?

1. 1.00
2. 1.33
3. 0.85
4. 1.18

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