You are considering a stock investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which operate in the same industry. LotsofDebt, Inc. finances its $30 million in assets with $29 million in debt and $1 million in equity. LotsofEquity, Inc. finances its $30 million in assets with $1 million in debt and $29 million in equity. Calculate the debt ratio, equity multiplier, and debt-to-equity ratio for the two firms.
Answer to relevant QuestionsMaggie’s Skunk Removal Corp.’s 2015 income statement listed net sales = $12.5 million, gross profit of $6.9 million, EBIT = $5.6 million, net income available to common stockholders = $3.2 million, and common stock ...Mandesa, Inc., has current liabilities of $8 million, current ratio of 2 times, inventory turnover ratio of 12 times, average collection period of 30 days, and credit sales of $64 million. Calculate the value of cash and ...Leonatti Labs’ year-end price on its common stock is $35. The firm has total assets of $50 million, debt ratio of 65 percent, no preferred stock, and 3 million shares of common stock outstanding. Calculate the ...Use the following information to complete the balance sheet below.Current ratio = 2.5 timesProfit margin = 10 percentSales = $1,200mROE = 20 percentLong-term debt to Long-term debt and equity = 55percentLast year, Lakesha’s Lounge Furniture Corporation had an ROE of 17.5 percent and a dividend payout ratio of 20 percent. What is the sustainable growth rate?
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