Explanation:

The debt-to-equity ratio measures the proportion of debt financing relative to equity financing. A ratio of 1.0 indicates equal amounts of debt and equity. The debt-to-capital ratio, which includes both debt and equity in the denominator, is calculated as follows:

• Debt-to-equity ratio = Total Debt / Total Shareholder's Equity = 1.0
• Debt-to-capital ratio = Total Debt / (Total Debt + Total Shareholder's Equity)

Given that Total Debt = Total Shareholder's Equity, the debt-to-capital ratio simplifies to:

Total Debt / (2 * Total Debt) = 0.5.

Option B is incorrect because it assumes Capital equals Equity, leading to a misinterpretation of the ratio. Option C is incorrect as it conflates the debt-to-capital ratio with financial leverage, which is a distinct measure of solvency.