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What is the debt ratio for a firm with an equity multiplier of 3.5?
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44.09 percent
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58.51 percent
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66.25 percent
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71.43 percent
Step by step
Solved in 3 steps
- What is the debt ratio for a firm with an equity multiplier of 3.5? ____ 44.09 percent ____ 58.51 percent ____ 66.25 percent ____ 71.43 percentWhat is the debt ratio for a firm with a debt-equity ratio of 0.5? Multiple Choice O 35% 33.3% 54% 66.7%What is the company's cost of debt? a. 9.21%b. 10.31%c. 11.5%d. 7.73% What is the company's cost of equity using the Capital Asset Pricing Model? a. 9.21%b. 10.31%c. 11.5%d. 7.73%
- firm with a debt ratio of 0.75, will have an equity multiplier of ____. a. 0.25 b. 4.00 c. 0.75 d. 1.00A firm has a debt-to-equity ratio of 2. What is its equity multiplier? 01 O 2.5 03 O 1.5 O 2What is the cost of equity for a firm where the required return on assets is 15.71%, the cost of debt is 6.92%, and the target debt/equity ratio is 1.19? Ignore taxes. O A) 19.05%
- 3. ABC Corp.’s equity multiplier is 1.25. What is its debt ratio? 4.Easy Corp.’s return on assets measure is 0.20 (20%. Its return on equity measure is 0.25 (25%). What is the firm’s equity multiplier?A firm has a debt-equity ratio of 1.10. What is the total Debt ratio? A) 0.52 B) 1.10Calculate the cost of equity with the CAPM Calculate the cost od debt based on what the company is currently paying for its debt - Beta of the industry = 1.16 - Equity Risk Premium = 6.97% - Risk-free rate = 3.77% - Objective capital structure of the industry = 13.24%
- A firm has a profit margin of 35.92, return on assets of 25.86 and a debt to equity ratio of 1.489. What is the firm's return on equity (ROE)? 0.96% 64.37% O None of these options are correct O 23.12% O 13.83%Which one of the following statements is correct? Multiple Choice If the total debt ratio is greater than .50, then the debt-equity ratio must be less than 1.0. Long-term creditors would prefer the times interest earned ratio be 1.4 rather than 1.5. The debt-equity ratio can be computed as 1 plus the equity multiplier. An equity multiplier of 1.2 means a firm has $1.20 in sales for every $1 in equity. An increase in the depreciation expense will not affect the cash coverage ratio. 1. A firm, its debt, and equity have β of 1.0, 0.5, and 3.0, respectively. What is the firm’s equity ratio?