Answer:
A. 1.84
Step-by-step explanation:
We have been given that Karen Price's net worth is $58,000. The face value of her mortgage is $89,000. The face value of the rest of her debt is $18,000.
[tex]\text{Debt to equity ratio}=\frac{\text{Total liabilities}}{\text{Total shareholder's equity}}[/tex]
We know that total liabilities include short term debt and long-term debt.
[tex]\text{Debt to equity ratio}=\frac{\$89,000+\$18,000}{\$58,000}[/tex]
[tex]\text{Debt to equity ratio}=\frac{\$107,000}{\$58,000}[/tex]
[tex]\text{Debt to equity ratio}=1.8448[/tex]
[tex]\text{Debt to equity ratio}\approx 1.84[/tex]
Therefore, Karen's debt-to-equity ratio 1.84 and option A is the correct choice.
