In Words, What Does an Equity Multiplier of 2 Mean

question 137

Multiple Choice

In words, what does an equity multiplier of 2 mean?

• A) Each dollar in assets the firm owns is supported by $2 in equity.
• B) Each dollar in equity the firm has supports $2 in assets.
• C) Each dollar in assets the firm owns is supported by $4 in equity.
• D) Each dollar in equity the firm has supports fifty cents in assets.
• E) Each dollar in assets the firm owns is supported by $2 in debt.

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Definitions:

Civil Liberties

Personal freedoms safeguarded legally against unfair intrusions by the government or others.

Joseph McCarthy

An American politician who served as a U.S. Senator from Wisconsin and is best known for his anti-communist activities and the resulting "McCarthyism" during the early 1950s.

Voting Rights Act

A landmark piece of federal legislation in the United States that prohibits racial discrimination in voting.

1965

A significant year marked by events like the passage of the Voting Rights Act in the United States, aimed at overcoming legal barriers at the state and local levels that prevented African Americans from exercising their right to vote.