Expert Analysts Resources (EAR) Has Provided You with the Following

question 4

Multiple Choice

Expert Analysts Resources (EAR) has provided you with the following information about three companies you are currently evaluating: According to this information, which firm would be considered riskiest?

• A) Acme, because its DFL equals 6.0, which is the highest leverage associated with any of the three firms.
• B) Acme, because its degree of total leverage (DT
• L) is almost equal to 10*.
• C) Apex, because it has the highest degree of total (DT
• L).
• D) Alps, because it has the highest DOL.
• E) Acme, because is has the lowest DOL.