Perry, Inc., has a total debt ratio of 0.36. What is its debt–equity ratio

Perry, Inc., has a total debt ratio of 0.36. What is its debt–equity ratio? (Round your answer to 2 decimal places. (e.g., 32.16))

Debt–equity ratio

What is its equity multiplier? (Round your answer to 2 decimal places. (e.g., 32.16))

Equity multiplier

Total debt ratio = 0.36 = TD / TA

Substituting total debt plus total equity for total assets, we get:

0.36 = TD / (TD + TE)

Solving this equation yields:

0.36(TE) = 0.64(TD)

Debt/equity ratio = TD / TE = 0.36 / 0.64 = 0.56

Equity multiplier = 1 + D/E = 1.56