Is the amount of debt that Company A has compatible with the trade-off theory of capital structure? Explain why/why not. a) consider the median leverage ratio of 30% and also the specific characteristics of Company A and Company B.

b) think about risk, profitability, collateral, the benefits of reducing taxes using interest tax shields, and growth opportunities.

Company A
Fiscal Period Ending	Dec-31-2019		Dec-31-2020		Dec-31-2021
Units	Millions	% of Total	Millions	% of Total	Millions	% of Total
Total Debt	44,176.0	67.7%	44,420.0	67.6%	44,246.0	64.0%
Total Common Equity	18,981.0	29.1%	19,299.0	29.4%	22,999.0	33.3%
Total Minority Interest	2,117.0	3.2%	1,985.0	3.0%	1,861.0	2.7%
Total Capital	65,274.0	100.0%	65,704.0	100.0%	69,106.0	100.0%
Leverage Ratio	0.14		0.17		0.14
Interest Coverage Ratio	11.2		7		7.1
Company B
Fiscal Period Ending	Dec-28-2019		Dec-26-2020		Dec-25-2021
Units	Millions	% of Total	Millions	% of Total	Millions	% of Total
Total Debt	33,628.0	69.3%	45,843.0	77.2%	42,378.0	72.4%
Total Common Equity	14,786.0	30.5%	13,454.0	22.7%	16,043.0	27.4%
Total Minority Interest	82.0	0.2%	98.0	0.2%	108.0	0.2%
Total Capital	48,496.0	100.0%	59,395.0	100.0%	58,529.0	100.0%

Leverage Ratio	0.14		0.19		0.15
Interest Coverage Ratio	11.6		8.7		6.6