What is the debt-to-equity ratio given a debt of $225 million and total equity of $860 million?

To calculate the debt-to-equity ratio, you divide the total debt by the total equity. The formula is:

[

\text{Debt-to-Equity Ratio} = \frac{\text{Total Debt}}{\text{Total Equity}}

]

Using the provided figures:

• Total Debt = $225 million

• Total Equity = $860 million

Now, substituting these values into the formula gives:

[

\text{Debt-to-Equity Ratio} = \frac{225}{860}

]

Calculating this provides:

[

\text{Debt-to-Equity Ratio} \approx 0.2616

]

To express this as a percentage, you multiply by 100:

[

0.2616 \times 100 \approx 26.16%

]

When rounded, this is typically reported as 26%. This value directly corresponds with the choice provided. The debt-to-equity ratio is an important measure of a company's financial leverage, indicating how much debt a company is using to finance its assets compared to the value of shareholders' equity. A ratio of 26% suggests that the company is using a moderate level of debt relative to equity.