The amount of assets per dollar of equity capital is called the Question 9 options: A) equity ratio. B) equity multiplier. C) as

Question

amid [387]

4 years ago

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The amount of assets per dollar of equity capital is called the Question 9 options: A) equity ratio. B) equity multiplier. C) as

set ratio. D) asset multiplier.

Business

1 answer:

S_A_V [24] · Answer 1 · 2021-11-22T20:00:09+03:00

Answer:

The correct answer is letter "B": equity multiplier.

Explanation:

The Equity Multiplier is a simple proportion used to calculate the financial leverage of the company. <em>The Equity Multiplier ratio is calculated by dividing the total assets by total equity</em>. When the company purchases major assets it can fund such acquisitions through debt or stock issuance. A high Equity Multiplier indicates that the company used more debt than equity to finance its purchases of assets.