Calculate the equity multiplier-calculate the debt-to-equity

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Reference no: EM131570272

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 $33.50 million in assets with $30.75 million in debt and $2.75 million in equity. LotsofEquity, Inc. finances its $33.50 million in assets with $2.75 million in debt and $30.75 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: EM131570272

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