alculate the debt ratio. (Round your answers to 2 decimal places.)                                            debt ratio Lotsofdebt Inc:                                               % Lotsofequity Inc:                                            %     Calculate the equity multiplier. (Round your answers to 2 decimal places.)                                             Equity Multiplier Lotsofdebt Inc:                                                          Timess                          Lotsodequity Inc:                                                      Times     Calculate the debt-to-equity. (Round your answers to 2 decimal places.)

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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 $38.00 million in assets with $33.75 million in debt and $4.25 million in equity. LotsofEquity, Inc. finances its $38.00 million in assets with $4.25 million in debt and $33.75 million in equity.

 

Calculate the debt ratio. (Round your answers to 2 decimal places.)

 

                                         debt ratio

Lotsofdebt Inc:                                               %

Lotsofequity Inc:                                            %

 

 

Calculate the equity multiplier. (Round your answers to 2 decimal places.)

                                            Equity Multiplier

Lotsofdebt Inc:                                                          Timess                         

Lotsodequity Inc:                                                      Times

 

 

Calculate the debt-to-equity. (Round your answers to 2 decimal places.)

                                 Debt to Equity

Lotsofdebt Inc:                                    Times

Lotsofequity Inc:                                 Times

 
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