There are two firms, A and B in the same industry. Firm A has a debt ratio of .8 and a TIER of 6. Firm B has a debt ratio of .6 and a TIER of 4.

Which would you rather lend to?

Question 7 options:

	B since it has a lower Debt Ratio.
	If the industry requires a small plant, i.e., assets, then I would lend to B because the Debt ratio is less important.
	A since it has a higher TIER.
	If the industry requires a large plant, i.e., assets, then I would lend to B because the Debt ratio is more important.