A company had a debt-to-equity ratio of 1.52 before issuing convertible bonds. This ratio included $400,000 in
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A company had a debt-to-equity ratio of 1.52 before issuing convertible bonds. This ratio included $400,000 in equity. The company issued convertible bonds. The value reported for the bonds on the balance sheet is $254,000, and the conversion rights are valued at $21,000.
Required:
After the issuance of the convertible bonds, what is the debt-to-equity ratio?
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