15-5. (Describing a firm's capital structure) (Related to Checkpoint 15.1 on page 502)Home Depot, Inc. (HD), operates as a home improvement retailer primarily in theUnited States, Canada, and Mexico. The balance sheet for Home Depot for February3, 2008, included the following liabilities and owners' equity:($ thousands)Financial StructureLiabilities$ 9,185,0002,047,0001,474,000$12,706,00011,383,0002,521,000$13,904,000$17,714,000$44,324,000Accounts payableShort-term/current debtOther current liabilitiesTotal current liabilitiesLong-term debtOther long-term liabilitiesLong-term liabilitiesStockholders’ equityTotala. What are Home Depot's debt ratio and interest-bearing debt ratio?b. If Home Depot has common equity with a market value of $44.9 billion and noexcess cash, what is the firm's debt-to-enterprise-value ratio? (Hint: Assume thatthe market value of the firm's interest-bearing debt equals its book value.)

The company's financial structure is made up of long-term capital funds that it has raised from…

Answered: 15–5. (Describing a firm's capital…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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