$($Using DuPont$$ analysis$)$

GarwrykGarwryk$,$

$$Inc$.,$ which is financed with debt and$$ equity, presently has a debt ratio of

$7676$

percent. What is the$$ firm's equity$$ multiplier? How is the equity multiplier related to the$$ firm's use of debt financing$($i$.$e$.,$ if the firm increased its use of debt financing would this increase or decrease its equity$$ multiplier$)?$ Explain.

Question content area bottom

Part $1$

What is the$$ firm's equity$$ multiplier?

The equity multiplier is given$$ by:

Equity Multiplier equals StartFraction $1$ Over $1$ minus Debt Ratio EndFractionEquity$$Multiplier$=11$Debt$$Ratio

The equity multiplier is

enter your response here.

$($Round to two decimal$$ places.$)\text{'}$