angley has a debt ratio of 0.3 and its competitor, Appleton, has a debt ratio equal to 0.7. Determine the statement below that is correct.

Multiple Choice

Higher financial leverage involves lower risk.

Appleton’s financial leverage is less than Langley’s financial leverage.

Appleton’s financial leverage is greater than Langley’s financial leverage.

Appleton finances a smaller percentage of its assets with liabilities as compared to Langley.

Langley has a higher risk from its financial leverage.