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Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed)

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Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Company A uses long-term debt to finance its assets, and company Buses capital penerated from shareholders to finance its assets. Which company would be considered a financially leveraged firm? Company Company Which of the following is true about the leveraging effect? Using financial leverage reduces a firm's potential for gains and lowes Using financial leverage can generate shareholder wealth, but Il a company fails to make the Interest and prindpal payments on its debt, credit default can reduce shareholder wealth. Green Penguin Pencil Company has a total asset turnover ratio of 6,00, net annual sales of $25,000,000, and operating expenses of $18,750,000 Oncluding depreciation and amortization). On its current balance sheet and income statement, respectively, it reported total debt of $2,187,500, on which it pays 7% interest on its outstanding debt. To analyze a company's financial leverage situation, you need to measure the firm's debt management ratios. Based on the preceding information, what are the values for Green Penguin Pencil's debt management ratios(Note: Round your answers to two decimal places.) X Using finandal leverage reduces a firm's potential for gains and losses. Using financial leverage can generate shareholder wealth, but a company fails to make the Interest and principal payments on its debt, credit default can reduce shareholder wealth A- Green Penguin Pencil Company has a total asset turnover ratio of 6.00, net annual sales of $25,000,000, and operating expenses of $18,750,000 (including depreciation and amortization). On its current balance sheet and income statement, respectively. It reported total debt of $2,187,500, an which it pays 7 Interest on its outstanding debt. To analyze a company's finance leverage situation, you need to measure the firm's debt management ratios. Based on the preceding Information, what are the values for Green Penguin Pendil's debt management ratios(Note: Round your answers to two decimal places.) Ratio Value Debt ratio Times-interest-earned ratio Green Penguin Penal Company raises around from creditors for each doll of equity. ory Influenced by a firm's ability to make interest payments and pay back its debt, alles is equal, creditors would prefer to give loans to companies debt ratios

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