Weghorst Co. has a debt-to-equity ratio of 3.80, compared to the industry average of 3.04. Its competitor Bellywood Co., however, has a debt-to- equity ratio of 5.70. Based on what debt-to-equity ratios imply, which of the following statements is true? Bellywood Co. has greater financial risk as compared to Weghorst Co. and to the average financial risk in the industry. Bellywood Co.'s creditors face lesser risk than the average financial risk in the industry. Bellywood Co. has higher creditworthiness as compared to Weghorst Co. Weghorst Co.'s shareholders expect magnified returns but higher risk as compared to Bellywood Co. 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 increase, reflecting an increase in the financial risk of the company. The market debt ratio will decrease, reflecting an increase in the financial risk of the company. The market debt ratio will decrease, reflecting a decrease in the financial risk of the company. O The market debt ratio will increase, reflecting a decrease in the financial risk of the company. Data Collected (Millions of dollars) Year 1 EBITDA $150 Interest payments $15 Principal payments $12 Lease payments $7 Bellywood Co. reported the following figures in its annual report. Based on the information, Bellywood Co. has the ability to cover its fixed financial charges times