Problem:
Carter, Inc., a manufacturer of electrical supplies, has an ROE of 23.1 percent, a profit margin of 4.30 percent, and a total asset turnover ratio of 2.79 times. Its peer group also has an ROE of 23.1 percent but has out performed Carter with a profit margin of 5.16 percent and a total assets turnover ratio of 3 times.
Required:
Question: Calculate the Carter's equity multiplier and peer group equity multiplier.
Note: Please show how you came up with the solution.