The Debt Ratio of Company a Is

question 219

Multiple Choice

The debt ratio of Company A is .31 and the debt ratio of Company B is .21. Based on this information, an investor can conclude:

• A) Company A has a lower risk from its financial leverage.
• B) Company B has more debt than Company A.
• C) Company A has 10% more assets than Company B.
• D) Company B has a lower risk from its financial leverage.
• E) Both companies have too much debt.

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