The following financial information pertains to Harrison Bank.
$\begin{array} { c r }
\text { Net Profit Margin } & 12.5 \% \
\text { Net Income } & \$ 1000 \
\text { Total Assets } & \$ 62,500 \
\text { Total Equity } & \$ 6250
\end{array}$
-What is the bank's equity multiplier?
A)1.6 times
B)10 times
C)12.8 times
D)16 times
E)None of the options is correct

Question

The following financial information pertains to Harrison Bank.
$\begin{array} { c r } 
\text { Net Profit Margin } & 12.5 \% \
\text { Net Income } & \$ 1000 \
\text { Total Assets } & \$ 62,500 \
\text { Total Equity } & \$ 6250
\end{array}$
-What is the bank's equity multiplier?
A)1.6 times
B)10 times
C)12.8 times
D)16 times
E)None of the options is correct

Quizplus · Accepted Answer

The equity multiplier is calculated as Total Assets divided by Total Equity. For Harrison Bank, it is $62,500 / $6,250 = 10 times.

The Following Financial Information Pertains to Harrison Bank -What Is the Bank's Equity Multiplier? A)1

The Following Financial Information Pertains to Harrison Bank -What Is the Bank's Equity Multiplier?
A)1