This question has me going absolutely bonkers! It makes no sense! I think I'm missing something. The book says that it's a "simple" problem (so maybe I'm a simple person):

"Bartley Barstools has an equity multiplier of 2.4, and its assets are financed with some combination [which the book doesn't provide] of long-term debt and common equity. What is its debt-to-assets ratio?"

Yet, with this being the only information, somehow, the book came up with an answer of 58.33%? How did the book come up with 58.33%? Is there some information missing for the problem? The only information I see is the equity multiplier, and it asks for the Debt-Assets Ratio. This is the best I can surmise -- where A = Assets, TCE = Total Common Equity, DR = Debt Ratio, TD = Total Debt, EM = Equity Multiplier, A/TCE = 2.4 A = 2.4(TCE) DR = TD / 2.4(TCE) How can you get a 58.33% out of that? Am I missing something? No constants are provided for any of its factors.