Assuming total invested capital = total assets, which of the following would have the highest equity multiplier? Enter question A. Company A with a debt to capital ratio of 80% B. Company B with a debt to capital ratio of 25% C. Company C with a debt to capital ratio of 60% D. Company D with a debt to capital ratio of 10%

College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter24: Analysis Of Financial Statements
Section: Chapter Questions
Problem 1CE
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Assuming total invested capital = total assets, which of the following would have the highest equity multiplier?

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A. Company A with a debt to capital ratio of 80%

B. Company B with a debt to capital ratio of 25%

C. Company C with a debt to capital ratio of 60%

D. Company D with a debt to capital ratio of 10%

 

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