Blue Sky Corporation has a debt-equity ratio of 0.5. Return on assets is 10 percent, and total equity is $450,000. a) What is the equity multiplier? b) What is the return on equity? c) What is the net income?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter3: Analysis Of Financial Statements
Section: Chapter Questions
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General accounting question

Blue Sky Corporation has a debt-equity
ratio of 0.5. Return on assets is 10
percent, and total equity is $450,000.
a) What is the equity multiplier?
b) What is the return on equity?
c) What is the net income?
Transcribed Image Text:Blue Sky Corporation has a debt-equity ratio of 0.5. Return on assets is 10 percent, and total equity is $450,000. a) What is the equity multiplier? b) What is the return on equity? c) What is the net income?
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