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shtirl [24]
3 years ago
7

You are considering a stock investment in one of two firms (Lotsof Debt, Inc. and LotsofEquity, Inc.), both of which operate in

the same
industry. LotsofDebt, Inc. finances its $32.00 million in assets with $30.00 million in debt and $2.00 milion in equity. LotsofEquity, Inc.
finances its $32.00 million in assets with $2.00 million in debt and $30.00 million in equity.
Calculate the debt ratio. (Round your answers to 2 decimal places.)
Debt ratio
LotsofDebt, Inc.
LotsofEquity, Inc.
%
Calculate the equity multiplier. (Round your answers to 2 decimal places.)
LotsofDebt, Inc.
LotsofEquity, Inc.
Equity multiplier
times
times
Calculate the debt-to-equity. (Round your answers to 2 decimal places.)
Debt-to-equity
LotsofDebt, Inc.
LotsofEquity, Inc.
times
times
Mathematics
1 answer:
saveliy_v [14]3 years ago
7 0

Answer:

LotsofDebt, Inc Debt Ratio is 93.75%

LotsofEquity, Inc Debt Ratio is 6.25%

equity multiplier LotsofDebt, Inc is 16

equity multiplier LotsofEquity, Inc is 1.0666666667

debt-to-equity LotsofDebt, Inc is $15 million

debt-to-equity LotsofEquity, Inc. is $0.0666666667 million

Step-by-step explanation:

In order to calculate the debt ratio of LotsofDebt, Inc and LotsofEquity, Inc.  we would have to make the following calculations:

Debt Ratio = Debt/Assets

According to the given data we have the following:

LotsofDebt, Inc Debt=$30 million

LotsofDebt, Inc Asset=Debt + Equity = $30 million + $2 million = $32 million

Therefore, LotsofDebt, Inc Debt Ratio =$30 million/$ 32 million

LotsofDebt, Inc Debt Ratio= 93.75%

LotsofEquity, Inc. Debt=$2 million

LotsofEquity, Inc Asset= Debt + Equity = $2 million + $30 million

LotsofEquity, Inc Debt Ratio = $2 million/$32 million

LotsofEquity, Inc Debt Ratio = 6.25%

In order to calculate the equity multiplier of LotsofDebt, Inc and LotsofEquity, Inc.  we would have to make the following calculations:

equity multiplier =Assets/Equity

equity multiplier LotsofDebt, Inc.=$32 million/$2 million

equity multiplier LotsofDebt, Inc= 16

equity multiplier LotsofEquity, Inc=$32 million/$30 million

equity multiplier LotsofEquity, Inc = 1.0666666667

In order to calculate the debt-to-equity of LotsofDebt, Inc and LotsofEquity, Inc.  we would have to make the following calculations:

debt-to-equity LotsofDebt, Inc=Debt/Equity

debt-to-equity LotsofDebt, Inc=$30 million/$2 million

debt-to-equity LotsofDebt, Inc= $15 million

debt-to-equity LotsofEquity, Inc.= $2 million/$30 million = 0.0666666667

debt-to-equity LotsofEquity, Inc.= $0.0666666667 million

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Now, we use definite integration to find the area between the different equation of line.

So, area enclosed between the equations is given by the

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To know more about area of triangle, visit here:

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4 0
1 year ago
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