Rough Corporation's total assets at the end of Year 2 were $1,247,000 and at the end of Year 1 were $1,270,000. The company's total liabilities at the end of Year 2 were $512,000 and at the end of Year 1 were $550,000. The company's total stockholders' equity at the end of Year 2 was $735,000 and at the end of Year 1 was $720,000. The company's equity multiplier is closest to:
A) 1.73
B) 1.44
C) 0.69
D) 0.58

Question

Quizplus · Accepted Answer

The equity multiplier is calculated as Total Assets / Total Stockholders' Equity. For Year 2, it is $1,247,000 / $735,000 = 1.70, which is closest to 1.73.

Rough Corporation's Total Assets at the End of Year 2