A firm has an equity multiplier of 1.3. This means that the firm has a: A...

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Answer 1

Answer #1

Equity Multiplier is Total Assets to Equity Shareholder capital = 1.3

which mean out of total capital Equity is 1/ 1.3 = .7692 OR 76.92% OR 77%

Which makes Debts as 100% - 77% = 23%

D/A will become = 23 % / 100% = 0.23 OR 23%

Option E is correct.

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Answer 2

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