Question: if a firm has a debt to equity ratio of 50 its overall debt ratio must be?
Answer: If the debt to equity ratio is less than 1.0, then the firm is generally less risky than firms whose debt to equity ratio is greater than 1.0. 3﻿. If the company, for example, has a debt to equity ratio of . 50, it means that it uses 50 cents of debt financing for every $1 of equity financing.