Question: Problem 3-5 Debt Management Ratios (LG3-3) You are considering a stock Investment in one of two firms (LotsofDebt, Inc. and LotsofEquity, Inc.), both of which
Problem 3-5 Debt Management Ratios (LG3-3) 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 $38.00 million in assets with $33.75 million in debt and $4.25 million in equity LotsofEquity, Inc. finances its $38.00 million in assets with $4.25 million in debt and $33.75 million in equity Calculate the debt ratio. (Round your answers to 2 decimal places.) LotsofDebt, Inc LotolEquity, Ino Debt ratio % % Calculate the equity multiplier. (Round your answers to 2 decimal places.) Lintolettire Lottof quity, Inc. Equity multiplier times times Calculate the debt-to-equity (Round your answers to 2 decimal places.) LotsofDebt. Inc LotsEquity, Inc Debt-to-equity times times
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