Nano-Technologies bought out RT-Micro using fi­nancing as follows: $16 million from mortgages, $4 million from retained earnings, $12 million from cash on hand, and $30 million from bonds. Determine the debt-to-equity mix.

What will be an ideal response?


Debt: 16 + 30 = $46 million
Equity: 4 + 12 = $16 million

% debt = 46/(46 + 16) = 74%
% equity = 16/62 = 26%

D-E mix is 74%-26%

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