The Equity Multiplier Is Equal To

question 102

Multiple Choice

The equity multiplier is equal to:

• A)one plus the debt-equity ratio.
• B)one plus the total asset turnover.
• C)total debt divided by total equity.
• D)total equity divided by total assets.
• E)one divided by the total asset turnover.

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Definitions:

Available-For-Sale

A classification for investments in securities that a company plans to sell but does not classify as actively traded or held to maturity.

Long-Term Investments

Assets purchased by a company intended to be held for more than one year for the purpose of earning a return.

Special Purpose

An activity or function created for a particular objective or for a specific job.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.