Question: Company X and Company Y are both managed successfully by teams of highly respected executives. The firms operate in different industries. After careful analysis, you

Company X and Company Y are both managed successfully by teams of highly respected executives. The firms operate in different industries. After careful analysis, you observe that Company X employs a very high level of financial leverage while Company Y employs almost none. How can both sets of executives be highly respected when their firms employ such different levels of financial leverage?

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