Question

You are working for a large mutual fund company as a financial analyst. You have been asked to review two competitive companies in the same industry. Both have similar cash flows and net earnings, but one has no debt in its capital structure while the other has a debt- to- equity ratio of 1.2. Based on this limited information, which company would you prefer?
Justify your conclusion. Would your preference be influenced by the companies’ industry?


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  • CreatedAugust 04, 2015
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