Question
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,
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.(Round your answers to 2 decimal places.)
Calculate the equity multiplier.(Round your answers to 2 decimal places.)
Calculate the debt-to-equity.(Round your answers to 2 decimal places.)
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