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 $33.50 million in assets with $30.75 million in debt and $2.75 million in equity. LotsofEquity, Inc. finances its $33.50 million in assets with $2.75 million in debt and $30.75 million in equity.
Calculate the debt ratio. (Round your answers to 2 decimal places.)
Debt ratio Lots of Debt %
Lots of Equity %
Calculate the equity multiplier. (Round your answers to 2 decimal places.)
Equity multiplier Lots of Debt ____ times
Lots of Equity____ times
Calculate the debt-to-equity. (Round your answers to 2 decimal places.)
Debt-to-equity Lots of Debt _____times
Lots of Equity ____times