Debt ratios measure the proportion of total assets financed by a firm's creditors. Weghorst Co. has a debt-to-equity ratio of 2.60, compared to the industry average of 3.12. Its competitor Bellywood Co., however, has a debt-to- equity ratio of 2.08. Based on what debt-to-equity ratios imply, which of the following statements is true? O Bellywood Co. has a greater risk of bankruptcy than Weghorst Co. O Weghorst Co. has greater financial risk as compared to Bellywood Co. but lower than the average financial risk in the industry. O Weghorst Co. has higher creditworthiness as compared to Bellywood Co. O Bellywood Co.'s creditors face higher risk than the average financial risk in the industry. Suppose the stock price of Bellywood Co. increases by 15%. What impact will it have on its market-to-debt ratio if nothing changes in the company's balance sheet? The market debt ratio will decrease, reflecting an increase in the financial risk of the company. O The market debt ratio will decrease, reflecting a decrease in the financial risk of the company. O The market debt ratio will increase, reflecting an increase in the financial risk of the company. The market debt ratio will increase, reflecting a decrease in the financial risk of the company. Data Collected (Millions of dollars) Year 1 EBITDA $750 $75 Interest payments Principal payments 5.81 $60 $34 Lease payments 4.64 7.19 Bellywood Co. reported the following figures in its annual report. 4.44 Based on the information, Bellywood Co. has the ability to cover its fixed financial charges times