The standard Debt-Equity ratio is:
- A2:1
- B1:1
- C1:2
- D4:1
Solution & Step-by-step Explanation
The Debt-Equity ratio evaluates the long-term solvency safety cushion of an enterprise. A standard, universally accepted safe norm for the Debt-Equity ratio is . This signifies that external long-term debts up to double the size of shareholders' internal equity capital is considered safe and acceptable.