If D/E=.8033 and D+E=1 solve for D and E.

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Kpsosna

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Im working on a finance problem solving for the weighted average cost of capital. I was given the debt to equity ratio which is .8033 and i cant for the life of me remember how to solve this using algebra.

If D/E=.8033 and D+E=1 solve for D and E.

I know what the answer is i would just like to know how to do it if this question were to arise again.
 
I'd try solving by substitution, using the second equation to solve for, say, D in terms of E. Then plug that into the first equation, and solve for E. Back-solve for D. :wink:

Eliz.

P.S. Welcome to FreeMathHelp! :D
 
im really not even sure where to start. i know you are supposd to combine the equations..dont you start by D=E+1 ..where do you go from there?
 
Solve the first one for D and sub into the second.

\(\displaystyle \L\\\frac{D}{E}=0.8033\)

\(\displaystyle \L\\D=0.8033E\)

Now, sub into the second and solve for E. You can then back sub to find D.

See?.
 
Tatoo this on your wrist (under your watch!):

If a/b = x [1]
and a+b = y [2]
then:
[1]: a = bx
substitute in [2]:
bx + b = y
b(x + 1) = y
b = y / (x + 1)
 
Kpsosna said:
Im working on a finance problem solving for the weighted average cost of capital. I was given the debt to equity ratio which is .8033 and i cant for the life of me remember how to solve this using algebra.

If D/E=.8033 and D+E=1 solve for D and E.

D/E = 0.8033

D/E + 1 = 1.8033

(D+E)/E = 1.8033

1/E = 1.8033

E = ???

D/E = 0.8033

D * 1/E = 0.8033

D * 1.8033 = 0.8033

D = ???

I know what the answer is i would just like to know how to do it if this question were to arise again.
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