Garwryk, inc., which is finance with debt and equity, presently has a debt ratio of 78 percent. What is the firm’s equity multiplier? How is the equity multiplier related to the firm’s use of debt financing (i.e., if the firm increased its use of debt financing would this increase or decrease its equity multiplier)? Explain What is the firm’s multiplier? The equity multiplier is given by: Equity multiplier =1 1-debt ratio The equity multiplier is Round to two decimal places

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