Calculate the equity multiplier

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Reference no: EM131608853

You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which operate in the same industry. LotsofDebt, Inc. finances its $30.50 million in assets with $29.25 million in debt and $1.25 million in equity. LotsofEquity, Inc. finances its $30.50 million in assets with $1.25 million in debt and $29.25 million in equity. Calculate the debt ratio. (Round your answers to 2 decimal places.) Debt ratio Lots of Debt % Lots of Equity % Calculate the equity multiplier. (Round your answers to 2 decimal places.) Equity multiplier Lots of Debt times Lots of Equity times Calculate the debt-to-equity. (Round your answers to 2 decimal places.) Debt-to-equity Lots of Debt times Lots of Equity times.

Reference no: EM131608853

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