Calculate the equity multiplier for both

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Reference no: EM132844414

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 $35.25 million in assets with $31.50 million in debt and $3.75 million in equity. LotsofEquity, Inc. finances its $35.25 million in assets with $3.75 million in debt and $31.50 million in equity.

Problem 1:
Calculate the debt ratio for both:

Problem 2: Calculate the equity multiplier for both:

Problem 3: Calculate the debt-to-equity for both:

Reference no: EM132844414

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