.5
The equity multiplier = debt to equity +1. Therefore, if the debt to equity ratio is 1.40, the equity multiplier is 2.40.
It is the ratio..
Weighted Average Cost of Capital. This means the overall (blended) rate of return that a business (or other financial asset) has to generate to satisfy (a) its shareholders, and (b) its loan providers. For example, if a business has an equity/debt ratio of 1:3, and the shareholders expect a 15% return and the lenders expect a 5% return, then the WACC would be 7.5%. The equity and debt rates of return are in theory determined by the business's risk profile which can be calculated with reference to the risk-free rate, using the Capital Asset Pricing Model.
The sum of the weighted dollar values as computed above is called "risk-adjusted assets," and used as the denominator for computation of Asset-Quality (equity-to-asset ratio),... === ===
how to control debt equity ratio
50%/6%= 8.3%
ROA = Net Profit Margin * Asset Turnover Asset Turnover = ROA/Profit Margin = 13.5/5 = 2.7%
Company's Total Assets Turnover Ratio is 5 and Equity multiplier is 1.5 times which is cal. as Net Sales/Total Assets and Total Assets/ Shareholder's equity resp. for the two ratios.
the return on equity divided by the return on assets
When the debt ratio is zero
less
The equity multiplier = debt to equity +1. Therefore, if the debt to equity ratio is 1.40, the equity multiplier is 2.40.
this ratio shows how much income is generated by equity of the company. it is a great contributor towards profitability of a company. return on equity is calculated as follows:Return on equity = (Net income / Total equity) x 100
It is the ratio..
Weighted Average Cost of Capital. This means the overall (blended) rate of return that a business (or other financial asset) has to generate to satisfy (a) its shareholders, and (b) its loan providers. For example, if a business has an equity/debt ratio of 1:3, and the shareholders expect a 15% return and the lenders expect a 5% return, then the WACC would be 7.5%. The equity and debt rates of return are in theory determined by the business's risk profile which can be calculated with reference to the risk-free rate, using the Capital Asset Pricing Model.
We know that, g = br Here, g = growth rate b = retention ratio = (1- dividend pay-out ratio) = (1 - .40) = .60 r = return on equity = .16 So, g = .60 x .16 = .096 or 9.6% (ans)
Return on assets is Net income/ total assets. Hence to arrive at net income we should ascertain total assets first, as the return on assets is provided at 8.7%. Total assets is sum of Equity plus Debt plus Other liabilities. We have total equity at USD 520000. Hence debt can be ascertained from the Debt Equity ratio at 1.40. But what about other liabilities? As it is not provided we will not be able to compute total assets and hence net income from the given particulars.