Answer (D) is correct . Total equity consists of the $226 of capital stock and $381 of retained earnings, or $607. Debt is given as the $790 of total liabilities. Thus, the ratio is 1.30 ($790 ¡Â $607).Answer (A) is incorrect because Total liabilities divided by common stock outstanding equals 3.49.
Answer (B) is incorrect because Equity divided by debt equals 0.77.
Answer (C) is incorrect because Total liabilities divided by retained earnings equals 2.07.
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The total debt to equity ratio for Ostrander Corporation in Year 2 is
