Swagerman Incorporated has total assets of $6 842 200 and total debt of
$3 000 000.What is the equity multiplier?
A)1.78
B)2.28
C)0.44
D)1.56
E)0.56

Question

Quizplus · Accepted Answer

The equity multiplier is calculated as Total Assets divided by Total Equity. Total Equity is Total Assets minus Total Debt, which is $6,842,200 - $3,000,000 = $3,842,200. The equity multiplier is $6,842,200 / $3,842,200 = 1.78.

Swagerman Incorporated Has Total Assets of $6 842 200 and Total