Companies have the opportunity to use varying amounts of different sources of financing, including internal and external sources, to acquire their assets, debt (borrowed) funds, and equity funds. Company A uses long-term debt to finance its assets, and company B uses capital generated from shareholders to finance its assets. Which company would be considered a financially leveraged firm? Company A Company B Which of the following is true about the leveraging effect? Using leverage can generate shareholder wealth, but if a company faik to make the interest and principal payments on its debt, credit default can reduce shareholder wealth. Using leverage reduces a firm's potential for gains and losses. Chilly Moose Fruit Producer has a total asset turnover ratio of 3.50x, net annual sales of $40 milion, and operating expenses of $18 miliion (Inciuding depreciation and amortizatian). On its balance sheet and income statement, respectively, it reported total debt of $1.75 milion on which it pays a 7% interest rate. To analyze a company's financial leverage situation, you need to measure the firm's debt Companies have the opportunity to use varying amounts of different sources of financing, including internal and external sources, to acquire their assets, debt (borrowed) funds, and equity funds. Company A uses long-term debt to finance its assets, and company B uses capital generated from shareholders to finance its assets. Which company would be considered a financially leveraged firm? Company A Company B Which of the following is true about the leveraging effect? Using leverage can generate shareholder wealth, but if a company faik to make the interest and principal payments on its debt, credit default can reduce shareholder wealth. Using leverage reduces a firm's potential for gains and losses. Chilly Moose Fruit Producer has a total asset turnover ratio of 3.50x, net annual sales of $40 milion, and operating expenses of $18 miliion (Inciuding depreciation and amortizatian). On its balance sheet and income statement, respectively, it reported total debt of $1.75 milion on which it pays a 7% interest rate. To analyze a company's financial leverage situation, you need to measure the firm's debt