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You plan to purchase debenture bonds from one of two companies in the same industry that are similar in size and performance. The first company

You plan to purchase debenture bonds from one of two companies in the same industry that are similar in size and performance. The first company has $800,000 in total liabilities, and $1,200,000 in equity. the second company has $600,000 in total liabilities, and $400,000 in equity.

Which company's debenture bonds are less risky based on the debt-to-equity ratio?

Show your calculations to support your decision.

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