1st blank option = (high or low)

5. Debt management ratios Companies use different sources for financing their assets-internal resources as xternal resources, and debt funding versus equity financing. Which of the following is considered a financially leveraged firm? O A company that uses only equity to finance its assets O A company that uses debt to finance some of its assets which of the following is true about the leveraging effect? Interest on debt can be deducted, leading to higher taxable income and a lower available operating income Interest on debt can be deducted, leading to lower taxable income and lower taxes. Influenced by a firm's ability to make interest payments and pay back its debt, if all else is equal, creditors would prefer to give loans to companies with times-interest-earned ratios (TIE)