From the balance sheets below, of a firm for 2008 and 2009, calculate Debt-Equity Ratio and...

From the balance sheets below, of a firm for 2008 and 2009, calculate Debt-Equity Ratio and Equity multiplier in 2009.

	2008	2009
Total Asset	422,300	448,750
Equity	240,050	273,550

Group of answer choices

0.69 and 1.77

0.64 and 1.64

0.74 and 1.89

0.54 and 1.39

0.59 and 1.51

Expert Solution

Total assets=Total liabilities+Total equity

Total debt=448,750-273,550

=$175200

Debt-equity ratio=Total debt/Total equity

=175200/273,550

=0.64(Approx)

Equity multiplier=Total assets/equity

=448,750/273,550

=1.64(Approx)

Hence the correct option is:

0.64 and 1.64

jeff jeffy answered 2 years ago

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