Question

Equity Multiplier and Return on Equity?Quinn Company has a debt–equity ratio of .75. Return on assets...

Equity Multiplier and Return on Equity?Quinn Company has a debt–equity ratio of .75. Return on assets is 8.6 percent, and total equity is $975,000. What is the equity multiplier? Return on equity? Net income?

Homework Answers

Answer #1

debt–equity ratio = Debt / Equity

Hence Debt = 0.75 * $ 975,000

= $ 731,250

Total Assets = Debt+ Equity

= $ 731,250 + 975,000

= $ 1,706,250

Equity Multiplier = Total Assets / Total Equity

= $ 1,706,250 / $ 975,000

= 1.75

Hence the correct answer is 1.75

Now, Return on Assets = Net Income / Total Assets

Hence Net Income= 1706250 * 8.6%

= $ 146,737.50

Hence the correct answer is $ 146,737.50

Return on Equity = Net Income / Total Equity

= $ 146,737.50 / $ 975,000

= 15.05%

Hence the correct answer is 15.05%

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Quinn Company has a debt–equity ratio of .8. Return on assets is 8.3 percent, and total...
Quinn Company has a debt–equity ratio of .8. Return on assets is 8.3 percent, and total equity is $535,000.    1-What is the equity multiplier? 2-What is the return on equity? 3-What is the net income?
Shelton Company has a debt-equity ratio of 1.33. return of assets is 7.58 percent, and total...
Shelton Company has a debt-equity ratio of 1.33. return of assets is 7.58 percent, and total equity is 665,000. what is the equity multiplier? what is the return on equity? what is the net income?
SME Company has a debt-equity ratio of .70. Return on assets is 9.00 percent, and total...
SME Company has a debt-equity ratio of .70. Return on assets is 9.00 percent, and total equity is $525,000. a. What is the equity multiplier? b. What is the return on equity?
Please consider the following ratios given: debt–equity ratio of 0.80 times Return on assets is 9.7...
Please consider the following ratios given: debt–equity ratio of 0.80 times Return on assets is 9.7 percent total equity is $735,000. Please solve for the following: equity multiplier, Return on equity, and Net income
SME Company has a debt-equity ratio of .70. Return on assets is 8.5 percent, and total...
SME Company has a debt-equity ratio of .70. Return on assets is 8.5 percent, and total equity is $540,000.    a. What is the equity multiplier? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the return on equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the net income? (Do not round intermediate calculations and round...
Y3K, Inc., has sales of $4,600, total assets of $3,425, and a debt-equity ratio of 1.30....
Y3K, Inc., has sales of $4,600, total assets of $3,425, and a debt-equity ratio of 1.30. If its return on equity is 16 percent, what its net income?
Y3K, Inc., has sales of $7,555, total assets of $3,565, and a debt−equity ratio of .42....
Y3K, Inc., has sales of $7,555, total assets of $3,565, and a debt−equity ratio of .42. Assume the return on equity is 14 percent.    What is its net income? (
Total assets = $780,000, debt-equity ratio = 0.62, profit margin = 5.49%, return on equity =...
Total assets = $780,000, debt-equity ratio = 0.62, profit margin = 5.49%, return on equity = 12.47%. 1) What is net income? 2) What are sales? 3) What is the return on assets? 4) What is the total asset turnover? 5) What is the equity muliplier? 6) What is the total debt ratio? Please show all steps.
Gates Appliances has a return-on-assets (investment) ratio of 21 percent.    a. If the debt-to-total-assets ratio...
Gates Appliances has a return-on-assets (investment) ratio of 21 percent.    a. If the debt-to-total-assets ratio is 40 percent, what is the return on equity? (Input your answer as a percent rounded to 2 decimal places.)        b. If the firm had no debt, what would the return-on-equity ratio be? (Input your answer as a percent rounded to 2 decimal places.)       
Y3K, Inc., has sales of $4,300, total assets of $3,160, and a debt-equity ratio of 1.40....
Y3K, Inc., has sales of $4,300, total assets of $3,160, and a debt-equity ratio of 1.40. If its return on equity is 11 percent, what its net income? Multiple Choice $144.83 $347.60 $38.40 $106.44 $473.00
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT