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:

Individual Identities

Refers to a person's distinct characteristics, values, and personal sense of self that differentiate them from others.

Marketing

The business process of identifying, anticipating, and satisfying customers' needs and desires through the creation and exchange of value.

Everyday Life

The daily activities, routines, interactions, and experiences of ordinary people.

Public Relations

The practice of managing the spread of information between an organization and the public.