The equity multiplier ratio is measured as total:
A) equity divided by total assets.
B) equity plus total debt.
C) assets minus total equity, divided by total assets.
D) assets plus total equity, divided by total debt.
E) assets divided by total equity.

Question

Quizplus · Accepted Answer

The equity multiplier ratio is calculated by dividing total assets by total equity. This helps investors calculate the amount of financing that a company has relied upon for its assets. Thus, the correct answer is E, assets divided by total equity.

The Equity Multiplier Ratio Is Measured as Total