Langley Has a Debt Ratio of 0

question 14

Multiple Choice

Langley has a debt ratio of 0.3 and its competitor,Appleton,has a debt ratio equal to 0.7.Determine the statement below that is correct.

• A)Appleton finances a smaller percentage of its assets with liabilities as compared to Langley.
• B)Appleton's financial leverage is less than Langley's financial leverage.
• C)Appleton's financial leverage is greater than Langley's financial leverage.
• D)Langley has a higher risk from its financial leverage.
• E)Higher financial leverage involves lower risk.

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Definitions:

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The commercial and often geographic heart of a city, characterized by high-density business, retail, and office spaces.

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A retail store that offers products at significantly lower prices than those of competitors, often focusing on discount or clearance items.

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