Calculating outstanding debt

[joyce72266]

EPS (Earnings per share) = $4.00
Book value per share = $20.00
Outstanding Shares = 200,000
Debt ratio = 40%

What is the outstanding debt?

This is how I tried figuring it out:

200,000 x 20 = 4,000,000
200,000 x 4 = 800,000

4,000,000 + 800,000 = 4,800,000

4,800,000 x 40% = 1,920,000


Can someone tell me where I went wrong here? Thanks.

 

[Zeezrom]

The way I see it.......You shouldn't need to add share earnings, because those would decrease your debt. The only thing to worry about should be the outstanding shares.

 

[gayland]

Debt Free

The increase in personal debt can’t all be blamed on overspending. After adjusting for inflation, wages have been flat for the past five years while the cost of essential goods and services like housing, food, medical care and transportation have risen over 11 percent according to the Federal Reserve Board’s most recent Survey of Consumer Finances.