equity multiplier
graphical multiplier
turnover multiplier
stock multiplier
Answer is Right!
Answer is Wrong!
The correct answer is: A. equity multiplier.
The equity multiplier is a financial ratio that measures the extent to which a company uses debt to finance its assets. It is calculated by dividing a company’s total assets by its common equity. A higher equity multiplier indicates that a company is using more debt to finance its assets, which can be risky if the company is unable to repay its debt.
The other options are incorrect because:
- A graphical multiplier is not a financial ratio.
- A turnover multiplier is a financial ratio that measures how efficiently a company uses its assets to generate sales. It is calculated by dividing a company’s sales by its total assets.
- A stock multiplier is a financial ratio that measures the extent to which a company’s stock price is affected by changes in its earnings per share. It is calculated by dividing a company’s stock price by its earnings per share.