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You are considering a stock investment in one of two firms ( LotsofDebt , Incorporated and LotsofEquity, Incorporated ) , both of which operate in

You are considering a stock investment in one of two firms (LotsofDebt, Incorporated and LotsofEquity, Incorporated), both of which operate in the same industry. LotsofDebt, Incorporated finances its $100 million in assets with $90 million in debt and $10 million in equity. LotsofEquity, Incorporated finances its $100 million in assets with $10 million in debt and $90 million in equity. What are the debt ratio, equity multiplier, and debt-to-equity ratio for the two firms?
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LotsofDebt: 90 percent, 10 times, 9 times, respectively; and LotsofEquity: 10 percent, 1.11 times, 0.1111 times, respectively
LotsofDebt: 10 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 90 percent, 10 times, 9 times, respectively
LotsofDebt: 90 percent, 1.11 times, 0.1111 times, respectively; and LotsofEquity: 10 percent, 10 times, 9 times, respectively

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