CORRECT ANSWER C. AS SHOWN BY THE DATA, STRICKLAND’S COMPETITOR...
51.
Correct answer c. As shown by the data, Strickland’s competitor has a greater degree of
financial leverage and a higher debt/equity ratio. The two measures indicate that the
competitor makes greater use of outside financing than Strickland. Strickland should,
therefore, consider increased outside borrowing to increase flexibility and fund research
and development.