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A firm has the following 3 ratios, compared to its industry peers: Firm Industry Profit Margin 10.5% Profit Margin 9.0% ROE 7.5% ROE 9.5% Debt

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A firm has the following 3 ratios, compared to its industry peers: Firm Industry Profit Margin 10.5% Profit Margin 9.0% ROE 7.5% ROE 9.5% Debt to total Assets 65% Debt to total Assets 35% What is the likely cause of its profit margin out-perfomance vs, industry? The firm has likely reached the limits of its leverage The firm's equity financing is providing high value to shareholders The firm has a low corporate tax rate Cc The firm is using higher debt financing to produce higher profit

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