Chapter 14, Problem 15F15

To determine

Concept Introduction:

Equity Multiplier

Equity multiplier is an indicator of the financial leverage i.e. the degree to which debt is used to fund the assets of the company. It is computed by dividing the total assets of the company to the closing balance of the stockholders equity. The closing balance is considered for computation.

  $\text{Equity Multiplier =}\frac{\text{Total Assets of the company for the reporting period}}{\text{Closing Balance of Shareholders Equity for the reporting period}}$

To Compute:

Equity Multiplier