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A firm purchases $100 of equity at the Reg T margin requirement of 50%. It invests $50 of its own funds and borrows $50 from the broker. Immediately following the trade, its margin account has $50 in equity and a $50 loan from the broker (The broker retains custody of the stock as collateral for the loan). If firm leverage is defined, per Malz, as Assets/Equity, then what is the change in the firm's economic balance sheet?
A
From 1.000 to 1.500.
B
From 1.250 to 1.875.
C
From 1.250 to 1.500.
D
From 1.500 to 1.500.