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Calculate the equity multiplier

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Reference no: EM132866421

Question - 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 $33.00 million in assets with $30.50 million in debt and $2.50 million in equity. LotsofEquity, Inc. finances its $33.00 million in assets with $2.50 million in debt and $30.50 million in equity.

Required -

1. Calculate the debt ratio.

2. Calculate the equity multiplier.

3. Calculate the debt-to-equity.

Reference no: EM132866421

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