Question: (Assessing leverage use) Financial data for three corporations are '1 St '6 displayed here: @. a. Which firm appears to be excessively leveraged? b. Which

(Assessing leverage use) Financial data for three corporations are '1 \"St '6 displayed here: @. a. Which firm appears to be excessively leveraged? b. Which firm appears to be employing financial leverage to the most appropriate degree? c. What explanation can you provide for the higher price/earnings ratio enjoyed by firm B as compared with firm A? Data table (Click on the following icon :1 in order to copy its contents into a spreadsheet.) MEASURE FIRM A FIRM B FIRM C INDUSTRY NORM Debt ratio 20% 25% 40% 20% Times interest earned 10 times 12 times 9 times 11 times Price/earnings ratio 11 times 13 times 8 times 12 times

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