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5.1) If a company has a debt ratio of .40. Which of the following statements are NOT true? A. The company has 60% more assets

5.1) If a company has a debt ratio of .40. Which of the following statements are NOT true?

A. The company has 60% more assets than liabilities (debt).

B. The company has a debt ratio of 40%

C. The company is heavily leveraged.

D. The company has financed 40% of its assets using debt.

E. The company is minimally leveraged.

5.2) Given the debt ratio of .40 (as indicated above) and a times interest earned of 5.8, describe in detail how you would evaluate this companies financial leverage/long-term solvency? (Be specific).

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