angley has a debt ratio of 0.3 and its competitor, Appleton, has a debt ratio equal...
angley 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.
Multiple Choice
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Higher financial leverage involves lower risk.
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Appleton’s financial leverage is less than Langley’s financial leverage.
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Appleton’s financial leverage is greater than Langley’s financial leverage.
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Appleton finances a smaller percentage of its assets with liabilities as compared to Langley.
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Langley has a higher risk from its financial leverage.
Homework Answers
Ans:
Appleton’s financial leverage is greater than Langley’s financial leverage. is Correct
Explanation:
Debt ratio= Total Liabilities/Total Assets
Ratio should be less to lower the risk and higher debt ratio invloves higher risk and lower debt ratio means lower the risk
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angley has a debt ratio of 0.3 and its competitor, Appleton, has
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