Crystal Lake, Inc., has a total debt ratio of 0.25. Required: (a)What is its debt-equity ratio?...

Question

Question

Answer 1

Answer #1

Debt equity ratio

= Total debt ratio/(1-total debt ratio)

= 0.25/(1-0.25)

= 0.25/0.75

= 0.3333

Equity multiplier =1+Debt equity ratio

= 1+0.3333

= 1.3333

Answer 2

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