Generic Company has a return on assets of 8% and a return on equity of 15%. Generic Company's equity multiplier is nearest to:
A) 0.1875
B) 0.533
C) 1.875
D) 5.333

Name: Generic Company has a return on assets of 8% and a return on equity of 15%. Generic Company's equity multiplier is nearest to: A) 0.1875 B) 0.533 C) 1.875 D) 5.333
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The equity multiplier is calculated as Return on Equity (ROE) / Return on Assets (ROA). Given ROE is 15% and ROA is 8%, the calculation is 0.15 / 0.08 = 1.875.

Generic Company Has a Return on Assets of 8% and a Return