A company reports the following on its balance sheet: . Total Debt = $250,000 . Total Equity = $125,000 Which of the following is true? a) The equity multiplier is 1.5 b) The debt-to-equity ratio is 2 c) The debt ratio is 0.5 d) The company is overleveraged
A company reports the following on its balance sheet: . Total Debt = $250,000 . Total Equity = $125,000 Which of the following is true? a) The equity multiplier is 1.5 b) The debt-to-equity ratio is 2 c) The debt ratio is 0.5 d) The company is overleveraged
Chapter3: Evaluation Of Financial Performance
Section: Chapter Questions
Problem 2P
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Which of the following is true?
Transcribed Image Text:A company reports the following on its balance sheet:
. Total Debt = $250,000
. Total Equity = $125,000
Which of the following is true?
a) The equity multiplier is 1.5
b) The debt-to-equity ratio is 2
c) The debt ratio is 0.5
d) The company is overleveraged
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