A Firm Has an Equity Multiplier of 1

question 118

Multiple Choice

A firm has an equity multiplier of 1.5.This means that the firm has a:

• A)debt-equity ratio of 0.67.
• B)debt-equity ratio of 0.33.
• C)total debt ratio of 0.50.
• D)total debt ratio of 0.67.
• E)total debt ratio of 0.33.

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Definitions:

Density

The mass per unit volume of a substance, often measured in grams per cubic centimeter (g/cm^3) or kilograms per cubic meter (kg/m^3).

Volume

The amount of three-dimensional space occupied by an object or enclosed within a container, usually measured in cubic units.

Material

A substance or mixture of substances that constitutes an object, used in the production and manufacturing of goods or constructions.

Density

A measure of mass per unit volume of a substance, often expressed in grams per cubic centimeter or kilograms per cubic meter.